Journeys from Entity to Enterprise Annual Report 2018-19 (Part - II) Appendix I Audited Balance Sheet along with Profit and Loss Account and Cash Flow Statement of SIDBI Independent Auditor’s Report The Shareholders of 3. Emphasis of Matter Small Industries Development Bank of India i. Refer Note No. 1 - As per RBI circular dated August 4, 2016, financial statements of the bank 1. Opinion are required to be presented in accordance with We have audited the accompanying Standalone the IND AS for accounting periods beginning Financial Statements of “Small Industries from April 1, 2018. However, as per the bank, Development Bank of India” (“the Bank”), which pending modification in SIDBI Regulations, comprise the Balance Sheet as at March 31, 2019, 2000 regarding the IND- AS Formats and the Profit and Loss account, Statement of Cash flows guidance from RBI, the financials for the year for the year then ended and notes to the financial ended are continued to be presented as per statements, including a summary of significant Indian GAAP. accounting policies. Refer Note No. 2.1 - During the year the ii.  In our opinion, the accompanying financial Bank has created Deferred Tax Assets of statements give a true and fair view of the financial ` 1,65,77,82,586/-, for the first time, on carried position of the bank as at March 31, 2019, of its forward Capital Losses, provision on Non financial performance and its cash flows for the year Performing Investment and provision on then ended in accordance with Regulation 14 (i) of Standard Assets made during year. Small Industries Development Bank of India General Regulations 2000, and the Accounting principles Our opinion is not modified in respect of these generally accepted in India. matters. 2. Basis for Opinion 4. Key Audit Matters We conducted our audit in accordance with the Key audit matters are those matters that, in our Standards on Auditing (SAs) issued by ICAI. Our professional judgment, were of most significance in responsibilities under those standards are further our audit of the financial statements of the current described in the Auditor’s Responsibilities for the period. These matters were addressed in the context Audit of the Financial Statements section of our of our audit of the standalone financial statements report. We are independent of the Bank in accordance as a whole, and in forming our opinion thereon, with the Code of Ethics issued by ICAI. We believe and we do not provide a separate opinion on these that the audit evidence we have obtained is sufficient matters. and appropriate to provide a basis for our opinion. The key audit matters identified in our audit are: Sr. No. Key Audit Matter Response to Key Audit Matter 1. Contingent Liability and Provision for Income Tax: In the recognition and measurement of In respect of bad debts written off and claimed under provisions, there is uncertainty about the section 36 (1) (viia) (c) of the Income Tax 1961, the timing or amount of the future expenditure Income Tax Department has disallowed the claim required to settle the liability. citing that the Bank has claimed double tax benefit as the Bank has already been allowed benefit at the time In respect of contingent liabilities, there of making provision for doubtful debts. are estimates and assumptions made to determine the amount to be disclosed. We have verified the previous pending litigation orders. In certain years, the Income Tax Appellate Tribunal has As a result, there is a high degree of judgment already allowed the Bank’s claim, which is challenged required for the recognition and measurement by the Department before higher authorities. Further, of provisions and disclosure of contingent the Bank has obtained views of external tax expert to liabilities. ascertain the chances of sustainability of Bank’s claim and based on their views, no provision for tax is made considering the same to be allowable. 2 Annual Report 2018-19 APPENDIX-I Sr. No. Key Audit Matter Response to Key Audit Matter The Bank has reported contingent liabilities of Thus, in respect to demands outstanding with regard Income Tax amounting to ` 6,98,13,20,359/- to section 36 (1) (viia) (c) and other disallowances / towards claims against the Bank not matters, where the assessment has been made against acknowledged as debts in the financial the Bank and appeals are pending, the same are statements. included in contingent liability and hence no provision is considered necessary. 2. Information Technology general Controls: A significant part of the Bank’s financial We focused our audit on IT systems and controls that reporting process is heavily reliant on IT are significant to the Bank’s financial reporting process. systems with automated processes and The Bank has a system in place for getting application controls over the capture, storage and software audits for identified Application Systems at extraction of information. reasonable intervals. Information Systems (IS) Audit is A fundamental component of these processes done at branches by officers of the Bank at reasonable and controls is ensuring appropriate user intervals. access and change management protocols We have relied on the Application Systems Audits exist and being adhered to. These protocols carried by external consultants and IS audits done at are important because they ensure that access the branches. and changes to IT systems and related data are made and authorised in an appropriate We have reviewed reports of external consultants and manner. IS audits done at the branches on sample basis and the same were found to be in order. Where required, we performed a greater level of testing to validate the integrity and reliability of data and reporting thereof. 5. Other Information 6. Other Matters The Bank’s Board of Directors is responsible for the Incorporated in these financial statements are the Other Information. The Other Information comprises returns of 25 Branches visited by us for the purpose the information included in the CMD’s Statement, of audit including Head Office which accounts for Directors’ Report, Overall Business Operations, 97.22% of Advances, 99.61% of Deposits, 100% of Management and Corporate Governance but does Borrowings, 95.49% of interest income on Advances, not include the financial statements and our auditor’s 99.51% of interest expense on Deposits and report thereon. 100% of interest expense on Borrowings. These branches have been selected in consultation with Our opinion on the financial statements does not the Bank. We have not visited remaining branches cover the Other Information and we do not express of the Bank and have reviewed their returns at the any form of assurance / conclusion thereon. In Head Office. connection with our audit of the financial statements, our responsibility is to read the Other Information and, 7. Responsibilities of Management for the in doing so, consider whether the Other Information is Financial Statements materially inconsistent with the financial statements Management of Bank is responsible for the or our knowledge obtained in the audit or otherwise preparation and fair presentation of the financial appears to be materially misstated. statements in accordance with Small Industries As on date, the CMD’s Statement, Directors’ Report, Development Bank of India General Regulations Overall Business Operations, Management and 2000, and the Accounting principles generally Corporate Governance are under preparation. When accepted in India, and for such internal controls as we read the same and if we conclude that there is management determines is necessary to enable any material misstatement therein, then we will the preparation of financial statements that are free communicate the matter to those charged with from material misstatement, whether due to fraud governance. or error. 3 Annual Report 2018-19 In preparing the financial statements, management of accounting and, based on the audit evidence is responsible for assessing the Bank’s ability obtained, whether a material uncertainty to continue as a going concern, disclosing, as exists related to events or conditions that may applicable, matters related to going concern and cast significant doubt on the Bank’s ability to using the going concern basis of accounting unless continue as a going concern. If we conclude that management either intends to liquidate the Bank or a material uncertainty exists, we are required to cease operations, or has no realistic alternative to draw attention in our auditor’s report to the but to do so. related disclosures in the financial statements or, if such disclosures are inadequate, to modify Those charged with governance are responsible for our opinion. Our conclusions are based on overseeing the Bank’s financial reporting process. the audit evidence obtained up to the date of our auditor’s report. However, future events 8. Auditor’s Responsibilities for the Audit of or conditions may cause the Bank to cease to the Financial Statements continue as a going concern. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole Evaluate the overall presentation, structure are free from material misstatement, whether due and content of the financial statements, to fraud or error, and to issue an auditor’s report including the disclosures, and whether the that includes our opinion. Reasonable assurance financial statements represent the underlying is a high level of assurance, but is not a guarantee transactions and events in a manner that that an audit conducted in accordance with SAs achieves fair presentation. will always detect a material misstatement when it We communicate with those charged with exists. Misstatements can arise from fraud or error governance regarding, among other matters, the and are considered material if, individually or in the planned scope and timing of the audit and significant aggregate, they could reasonably be expected to audit findings, including any significant deficiencies influence the economic decisions of users taken on in internal control that we identify during our audit. the basis of these financial statements. We also provide those charged with governance with As part of an audit in accordance with SAs, we a statement that we have complied with relevant exercise professional judgment and maintain ethical requirements regarding independence, and to professional skepticism throughout the audit. We communicate with them all relationships and other also: matters that may reasonably be thought to bear on Identify and assess the risks of material our independence, and where applicable, related misstatement of the financial statements, safeguards. whether due to fraud or error, design and perform audit procedures responsive to 9. Report on Other Legal and Regulatory those risks, and obtain audit evidence that is Requirements sufficient and appropriate to provide a basis for We report that: our opinion. The risk of not detecting a material misstatement resulting from fraud is higher i. The Balance Sheet, Profit and Loss Account than for one resulting from error, as fraud may and Cash Flow Statement have been drawn involve collusion, forgery, intentional omissions, up in accordance with the requirements of misrepresentations, or the override of internal the Regulation 14(i) of the Small Industries control. Development Bank of India General Regulations, 2000. Obtain an understanding of internal control relevant to the audit in order to design ii. We have sought and obtained all the information audit procedures that are appropriate in the and explanations, which to the best of our circumstances. knowledge and belief were necessary for the Evaluate the appropriateness of accounting purpose of our audit and have found them to be policies used and the reasonableness of satisfactory. accounting estimates and related disclosures iii. In our opinion, proper books of account as made by management. required by law have been kept by the Bank so Conclude on the appropriateness of far as appears from our examination of those management’s use of the going concern basis books. 4 Annual Report 2018-19 APPENDIX-I iv. The Balance Sheet, the Statement of Profit and vii. In our opinion, the aforesaid financial Loss Account and Cash Flow Statement dealt statements dealt with by this report comply with by this Report are in agreement with Books with the applicable Accounting Standards. of Account. v. The transactions of the Bank, which have come For CHHAJED & DOSHI to our notice, have been within the powers of Chartered Accountants the Bank. [Firm’s Reg. No. 101794W] vi. The returns received from the offices and CA Kiran K. Daftary branches of the Bank have been found adequate Camp: Lucknow Partner for the purposes of our audit. Date: 10th May 2019 Membership No. 010279 5 Annual Report 2018-19 Balance Sheet as at March 31, 2019 (Amount in `) SCHEDULES March 31, 2019 March 31, 2018 CAPITAL AND LIABILITIES Capital I 5,31,92,20,310 5,31,92,20,310 Reserves, Surplus and Funds II 1,61,53,16,39,410 1,43,59,98,17,005 Deposits III 7,19,22,47,49,673 4,03,74,61,14,199 Borrowings IV 5,96,99,79,07,871 4,66,09,11,12,071 Other Liabilities and Provisions V 75,27,76,17,911 69,13,74,48,226 Deferred Tax Liability (refer Note 2) 25,71,28,715 80,08,18,451 Total 15,58,60,82,63,890 10,88,69,45,30,262 ASSETS Cash and Bank Balances VI 54,05,25,12,178 10,31,46,03,434 Investments VII 88,18,19,96,172 92,02,12,79,977 Loans & Advances VIII 13,62,30,37,01,258 9,52,90,68,68,896 Fixed Assets IX 2,85,40,92,585 2,40,83,72,938 Other Assets X 51,21,59,61,697 31,04,34,05,017 Total 15,58,60,82,63,890 10,88,69,45,30,262 Contingent Liabilities XI 93,65,32,75,072 89,79,97,51,555 Significant Accounting Policies XV Notes to Accounts XVI The Schedules referred to above form an integral part of the Balance Sheet. As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 6 Annual Report 2018-19 APPENDIX-I Profit & Loss Account for the year ended March 31, 2019 (Amount in `) SCHEDULES March 31, 2019 March 31, 2018 INCOME Interest and Discount XII 94,82,13,19,357 61,79,65,52,201 Other Income XIII 4,34,24,76,550 4,20,75,66,787 Total 99,16,37,95,907 66,00,41,18,988 EXPENDITURE Interest & Financial charges (refer Note 7) 69,03,01,12,006 40,82,58,44,806 Operating Expenses XIV 5,12,37,49,980 5,10,70,54,913 Provisions & Contingencies (2,48,79,420) 44,67,44,477 Total 74,12,89,82,566 46,37,96,44,196 Profit before Tax 25,03,48,13,341 19,62,44,74,792 Provision for Income Tax (refer Note 3) 6,05,64,69,013 4,74,99,75,461 Deferred Tax Adjustment [(Asset) / Liability] (refer Note 2) (54,36,89,736) 58,23,24,762 Profit after Tax 19,52,20,34,064 14,29,21,74,569 Profit brought forward 43,13,26,886 43,56,01,325 Total Profit / (Loss) 19,95,33,60,950 14,72,77,75,894 Appropriations Transfer to General Reserve 16,64,00,00,000 12,20,00,00,000 Transfer to Special reserve u/s 36(1)(viii) of The Income 70,00,00,000 70,00,00,000 Tax Act, 1961 Others Transfer to Investment Fluctuation Reserve 44,22,00,000 - Transfer to Staff Welfare Fund 2,00,00,000 2,00,00,000 Dividend on Shares 1,36,96,99,230 1,14,36,32,367 Tax on Dividend 28,15,45,705 23,28,16,641 Surplus in Profit & Loss account carried forward 49,99,16,015 43,13,26,886 Total 19,95,33,60,950 14,72,77,75,894 Basic/Diluted Earning Per Share (refer Note 20) 36.70 26.87 Significant Accounting Policies XV Notes to Accounts XVI The Schedules referred to above form an integral part of the Profit & Loss Account. As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 7 Annual Report 2018-19 Schedules to Balance Sheet (Amount in `) CAPITAL AND LIABILITIES March 31, 2019 March 31, 2018 Schedule I: Capital (a) Authorized Capital 10,00,00,00,000 10,00,00,00,000 - Equity Share Capital (75,00,00,000 Equity 7,50,00,00,000 7,50,00,00,000 Shares of ` 10/- each) -  Preference Share Capital (25,00,00,000 2,50,00,00,000 2,50,00,00,000 Redeemable Preference Shares of ` 10/- each) (b) Issued, Subscribed and Paid-up Capital: 5,31,92,20,310 5,31,92,20,310 - Equity Share Capital (53,19,22,031 Equity 5,31,92,20,310 5,31,92,20,310 Shares of ` 10/- each) -  Preference Share Capital - - Total 5,31,92,20,310 5,31,92,20,310 Schedule II: Reserves, Surplus and Funds A) Reserves i) General Reserve - Opening Balance 1,07,99,51,37,200 95,79,51,37,200 - Additions during the year 16,64,00,00,000 12,20,00,00,000 - Utilisations during the year - - - Closing Balance 1,24,63,51,37,200 1,07,99,51,37,200 ii) Share Premium - Opening Balance 16,68,07,79,690 16,68,07,79,690 - Additions during the year - - - Utilisations during the year - - - Closing Balance 16,68,07,79,690 16,68,07,79,690 iii) Specific Reserves a) Investment Reserve - Opening Balance - - - Additions during the year - - - Utilisations during the year - - - Closing Balance - - Special Reserve created and maintained u/s b)  36 (1) (viii) of The Income Tax Act, 1961 - Opening Balance 14,97,00,00,000 14,27,00,00,000 - Additions during the year 70,00,00,000 70,00,00,000 - Utilisations during the year - - - Closing Balance 15,67,00,00,000 14,97,00,00,000 c) Other Reserves i) Investment Fluctuation Reserve - Opening Balance 70,37,86,026 70,37,86,026 - Additions during the year 44,22,00,000 - - Utilisations during the year - Closing Balance 1,14,59,86,026 70,37,86,026 8 Annual Report 2018-19 APPENDIX-I Schedules to Balance Sheet (Amount in `) CAPITAL AND LIABILITIES March 31, 2019 March 31, 2018 B) Surplus in Profit and Loss account 49,99,16,015 43,13,26,886 C) Funds a) National Equity Fund - Opening Balance 2,56,95,54,646 2,56,29,86,071 - Additions / Write back during the year 8,28,35,216 65,68,575 - Utilisations during the year - - - Closing Balance 2,65,23,89,862 2,56,95,54,646 b) Staff Welfare Fund - Opening Balance 24,92,32,557 24,68,86,023 - Additions during the year 2,00,00,000 2,00,00,000 - Utilisations during the year 2,18,01,940 1,76,53,466 - Closing Balance 24,74,30,617 24,92,32,557 c) Others - - Total 1,61,53,16,39,410 1,43,59,98,17,005 Schedule III Deposits A) Fixed Deposits 64,86,00,49,673 53,74,61,14,199 B) From Banks a) Under MSME Refinance Fund 5,80,00,00,00,000 2,80,00,00,00,000 b) Under MSME Risk Capital Fund 15,00,00,00,000 15,00,00,00,000 c) Others -From Foreign & Private Sector Banks - - d) Under MSME India Aspiration Fund 9,36,47,00,000 5,00,00,00,000 Under Fund for Venture Capital in MSME sector e)  50,00,00,00,000 50,00,00,00,000 2014-15 Subtotal (B) 6,54,36,47,00,000 3,50,00,00,00,000 Total 7,19,22,47,49,673 4,03,74,61,14,199 Schedule IV Borrowings I) Borrowings in India 1. From Reserve Bank of India - - 2. From Government of India (refer Note 11) 21,46,93,19,323 22,16,75,23,471 (including Bonds subscribed by GOI) 3. Bonds & Debentures (refer Note 5) 1,44,95,50,00,000 1,65,49,00,00,000 4. From Other Sources - Commercial Paper 47,50,00,00,000 57,00,00,00,000 - Certificate of Deposits 1,51,55,00,00,000 1,02,03,00,00,000 - Term Loans from Banks 1,24,46,56,06,275 5,14,97,50,157 - Term Money Borrowings - - - Others (refer Note 14) 14,99,20,398 2,99,81,04,466 Subtotal (I) 4,90,08,98,45,996 3,54,83,53,78,094 9 Annual Report 2018-19 Schedules to Balance Sheet (Amount in `) CAPITAL AND LIABILITIES March 31, 2019 March 31, 2018 II) Borrowings outside India (a) KFW, Germany 14,44,29,19,606 15,46,66,00,852 (b) Japan International Cooperation Agency (JICA) 36,80,54,19,486 41,56,06,40,163 (c) IFAD, Rome (refer Note 18) 1,12,48,25,395 1,16,52,80,010 (d) World Bank 51,47,72,81,791 49,29,67,67,641 (e) Others 3,05,76,15,597 3,76,64,45,311 Subtotal (II) 1,06,90,80,61,875 1,11,25,57,33,977 Total (I & II) 5,96,99,79,07,871 4,66,09,11,12,071 Schedule V Other Liabilities and Provisions: Interest Accrued 28,41,05,15,952 20,79,29,45,100 Provision for SIDBI Employees' Provident Fund 2,80,17,62,288 2,17,11,80,143 Provision for SIDBI Pension Fund 45,55,68,252 45,98,78,213 Provision for Sick Leave Fund 11,18,93,681 21,12,89,197 Provision for Medical Assistance Scheme Fund 18,00,58,808 19,30,76,860 Provision for Employees Benefit 1,09,09,74,143 2,72,65,14,780 Others (including provisions) (refer Note 13 & 23) 33,53,24,69,017 35,84,05,17,044 Provisions for Exchange Rate Fluctuation (refer Note 10) 1,53,73,62,766 1,53,73,62,766 Contingent provisions against standard assets 5,50,57,68,069 3,82,82,35,115 (refer Note 24) Proposed Dividend (including tax on dividend) 1,65,12,44,935 1,37,64,49,008 (refer Note 21) Total 75,27,76,17,911 69,13,74,48,226 10 Annual Report 2018-19 APPENDIX-I Schedules to Balance Sheet (Amount in `) ASSETS March 31, 2019 March 31, 2018 Schedule VI Cash & Bank Balances 1. Cash in Hand & Balances with Reserve Bank of India 6,09,656 6,13,630 2. Balances with other Banks (a) In India i) in current accounts 63,21,22,564 20,69,20,084 ii) in other deposit accounts 47,22,98,66,715 2,49,98,73,284 (b) Outside India i) in current accounts 16,18,137 6,58,942 ii) in other deposit accounts 6,18,82,95,106 7,60,65,37,494 Total 54,05,25,12,178 10,31,46,03,434 Schedule VII Investments [Net of Provisions] A) Treasury operations 1. Securities of Central and State Governments 4,46,80,73,744 4,55,71,12,568 2. Shares of Banks & Financial Institutions - 23,95,12,137 Bonds & Debentures of Banks & Financial 3.  6,40,56,57,541 12,66,68,18,755 Institutions Stocks, Shares, Bonds & Debentures of 4.  1,99,92,72,771 2,48,80,48,275 Industrial Concerns 5. Short Term Bills Rediscounting Scheme - - 6. Others 44,60,07,32,633 42,66,30,80,482 Subtotal (A) 57,47,37,36,689 62,61,45,72,217 B) Business Operations 1. Shares of Banks & Financial Institutions 1,78,47,71,142 1,75,12,24,775 Bonds & Debentures of Banks & Financial 2.  - - Institutions Stocks, Shares, bonds & Debentures of 3.  4,85,32,42,053 3,82,54,41,280 Industrial Concerns 4. Investment in Subsidiaries 17,51,04,98,740 17,51,04,98,740 5. Others 6,55,97,47,548 6,31,95,42,965 Subtotal (B) 30,70,82,59,483 29,40,67,07,760 Total (A+B) 88,18,19,96,172 92,02,12,79,977 Schedule VIII Loans & Advances [Net of Provisions] A) Refinance to - Banks and Financial Institutions 11,62,77,55,95,686 7,26,22,51,69,807 - Micro Finance Institutions 11,71,50,70,388 15,79,76,70,001 - NBFC 93,69,98,42,689 1,14,11,67,93,703 - Bills Rediscounted - - - Others (Resource Support) - - Subtotal (A) 12,68,19,05,08,763 8,56,13,96,33,511 11 Annual Report 2018-19 Schedules to Balance Sheet (Amount in `) ASSETS March 31, 2019 March 31, 2018 B) Direct Loans - Loans and Advances 88,96,65,09,187 87,74,77,86,153 - Receivable Finance Scheme 5,14,66,83,308 9,01,94,49,232 - Bills Discounted - - Subtotal (B) 94,11,31,92,495 96,76,72,35,385 Total (A+B) 13,62,30,37,01,258 9,52,90,68,68,896 Schedule IX Fixed Assets [Net of Depreciation] 1. Premises (refer Note 9 & 17) 2,83,23,37,105 2,38,98,20,372 2. Others 2,17,55,480 1,85,52,566 Total 2,85,40,92,585 2,40,83,72,938 Schedule X Other Assets: Accrued Interest 32,90,17,83,584 16,46,00,48,900 Advance Tax (Net of provision) 3,73,69,24,296 3,38,43,98,721 Others 7,12,12,90,646 5,64,18,92,790 Expenditure to the extent not written off (refer Note 6) 7,45,59,63,171 5,55,70,64,606 Total 51,21,59,61,697 31,04,34,05,017 Schedule XI CONTINGENT LIABILITIES i) Claims against the Bank not acknowledged as 6,98,13,20,359 3,53,80,94,592 debts (refer Note 4) ii) On account of Guarantees / Letters of Credit 54,95,08,487 59,49,90,462 iii) On account of Forward Contracts 1,03,14,60,100 57,76,04,313 iv) On account of Underwriting Commitments - - v) On account of uncalled monies on partly paid 6,33,78,34,494 - shares, debentures Other items for which the Bank is contingently vi)  78,75,31,51,632 85,08,90,62,188 liable (derivative contracts etc.) Total 93,65,32,75,072 89,79,97,51,555 12 Annual Report 2018-19 APPENDIX-I Schedules to Profit & Loss Account (Amount in `) March 31, 2019 March 31, 2018 Schedule XII Interest and Discount 1. Interest and Discount on Loans, Advances and Bills 91,28,15,41,701 58,22,02,55,330 2. Income on Investments / Bank balances 3,53,97,77,656 3,57,62,96,871 Total 94,82,13,19,357 61,79,65,52,201 Schedule XIII Other Income: 1. Upfront and Processing Fees 31,36,51,911 20,95,56,263 2. Commission and Brokerage 1,49,28,003 1,83,08,305 3. Profit on sale of Investments 2,50,74,34,846 1,16,51,82,129 Income earned by way of dividends etc. from 4.  25,62,65,741 18,06,26,903 Subsidiaries / Associates 5. Provision of Earlier Years written Back - - 6. Others (refer Note 16) 1,25,01,96,049 2,63,38,93,187 Total 4,34,24,76,550 4,20,75,66,787 Schedule XIV Operating Expenses: Payments to and provisions for employees 3,68,56,94,181 3,79,44,65,377 Rent, Taxes and Lighting 18,91,63,591 20,06,75,587 Printing & Stationery 89,85,897 98,12,612 Advertisement and Publicity 5,47,52,845 3,39,22,299 Depreciation / Amortisation on Bank's Property 18,26,95,963 11,33,97,507 Directors’ fees, allowances and expenses 34,08,920 55,98,607 Auditor’s Fees 30,72,480 35,73,052 Law Charges 1,76,48,706 1,37,60,919 Postage, Courier, Telephones etc 20,68,494 23,26,271 Repairs and maintenance 12,34,73,048 9,45,67,488 Insurance 43,83,945 47,17,314 Contribution to CGTMSE - - Other Expenditure 84,84,01,910 83,02,37,880 Total 5,12,37,49,980 5,10,70,54,913 13 Annual Report 2018-19 Schedules to Balance Sheet SCHEDULE XV – SIGNIFICANT ACCOUNTING (iv) Commitment charges, service charges on POLICIES seed capital / soft loan assistance and royalty income are accounted for on accrual basis in 1. BASIS OF PREPARATION respect of standard (performing) assets. The financial statements have been prepared to comply in all material respects with the Small (v) Dividend on shares held in industrial concerns Industries Development Bank of India Act, 1989 and and financial institutions is recognized as regulations thereof, prudential norms prescribed income when the right to receive the dividend is by Reserve Bank of India, applicable Accounting established. Standards issued by the Institute of Chartered Income from Venture Capital funds are (vi)  Accountants of India and practices prevailing in the accounted on realization basis. Redemption Banking Industry. The financial statements have of unit/shares in Venture Capital fund, while in been prepared under the historical cost convention HTM category is not treated as a sale. on an accrual basis, unless otherwise stated. Except otherwise mentioned, the accounting policies that Recovery in non-performing assets (NPA) is to (vii)  are applied by the Bank, are consistent with those be appropriated in the following order: used in the previous year. a) overdue interest upto the date of NPA, Use of Estimates: b) principal, The preparation of financial statements in c) cost &charges, conformity with Generally Accepted Accounting d) interest and Principles (GAAP) requires the management to make e) penal interest. estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure Gain/loss on sale of loans and advances (viii)  of contingent liabilities as of the date of the financial through direct assignment is recognized in line statements and the reported income and expenses with the extant RBI guidelines. for the reporting period. Management believes that these estimates and assumptions are reasonable (ix) Amounts recovered against debts written-off and prudent. However, actual results could differ in earlier years are recognized as income in the from these estimates. Any revision to accounting Profit and Loss account. estimates is recognized prospectively in current and (x) Profit or loss on sale of investment: Profit or future periods in accordance with the requirements loss on sale of investments in any category is of the respective accounting standard. taken to profit & loss account. However, in case of profit on sale of investments under “Held to 2. REVENUE RECOGNITION Maturity” category an equivalent amount net Revenue is recognized to the extent it is probable of applicable taxes is appropriated to Capital that the economic benefits will flow to the Bank and Reserves. the revenue can be reliably measured. Amount lying as unclaimed liabilities (other (xi)  A) INCOME: than statutory liabilities) for a period of more (i) Interest income including penal interest is than seven years are recognized as income. accounted for on accrual basis, except in the case of non-performing assets where it is The bank has accounted for interest on income (xii)  recognized upon realization. tax refunds upon receipt of such refund orders / Order giving effects issued by Income Tax (ii) Income in the Profit & Loss Account is Department. shown gross i.e. before provisions as per RBI guidelines and other provisions as per Bank’s B) EXPENDITURE: internal policy. (i) All expenditures are accounted for on accrual basis except Development Expenditure which Discount received in respect of bills discounted (iii)  is accounted for on cash basis. / rediscounted and on discounted instruments is recognized over the period of usance of the (ii) Discount on Bonds and Commercial Papers instruments on a constant yield basis. issued are amortized over the tenure of Bonds 14 Annual Report 2018-19 APPENDIX-I and Commercial Paper. The expenses relating scrip under this category is revalued to issue of Bonds are amortized over the tenure and net depreciation under any of of the Bonds. the classification mentioned above is recognized in the profit & loss account. 3. INVESTMENTS Net appreciation under any classification (i) In terms of extant guidelines of the Reserve is ignored. The book value of individual Bank of India on investment classification and scrip is not changed after the revaluation. valuation, the entire investment portfolio is categorized as “Held to Maturity”, “Available for (ii) An investment is classified as ‘Held To Sale” and “Held for Trading”. Investments are Maturity’, ‘Available For Sale’ or ‘Held For valued in accordance with RBI guidelines. The Trading’ at the time of its purchase and investments under each category are further subsequent shifting amongst categories classified as and its valuation is done in conformity with RBI guidelines. a) Government Securities, b) Other approved securities, (iii) Treasury Bills, commercial papers and c) Shares, certificates of deposit being discounted d) Debentures & Bonds, instruments are valued at carrying cost. e) Subsidiaries/ joint ventures and (iv) The quoted Government Securities are f) Others (Commercial Paper, Mutual Fund valued at market prices and unquoted/ Units, Security Receipts, Certificate of non-traded government securities are Deposits etc.) valued at prices declared by Financial Benchmark India Pvt. Ltd. (FBIL). (a) Held to Maturity: (v) Investments which are made out of Investments acquired with the intention the Corpus or Funds provided by the to hold till maturity are categorized under Held to Maturity. Such investments are Government of India and netted off from carried at acquisition cost unless it is the related Fund balances are carried at more than the face value, in which case cost and not subjected to RBI guidelines the premium is amortized over the period of valuation. remaining to maturity. Investments in (vi) Recording purchase and sale transactions subsidiaries classified as Held To Maturity. in Investments is done following ‘Settlement Date’ accounting. Diminution, other than temporary, in the value of investments under this category is The debentures / bonds / shares deemed (vii)  provided for each investment individually. to be in the nature of advance, are subject to the usual prudential norms applicable to Held for Trading: (b) loans & advances. Investments acquired for resale within 90 days with the intention to take advantage Cost of investments is determined on the (viii)  of the short-term price/interest rate weighted average cost method. movements are categorized under Held for Trading. The investments in this (ix) Brokerage, commission, etc. paid at the category are revalued scrip-wise and net time of acquisition/ sale are recognized in appreciation /depreciation is recognized the profit & loss account. in the profit & loss account, with (x) Broken period interest paid / received corresponding change in the book value on debt investment is treated as interest of the individual scrips. expenses / income and is excluded from cost / sale consideration. In respect of traded/ quoted investments, the market price is taken from the trades/ (xi) In respect of unquoted investments in quotes available on the stock exchanges. industrial concerns under Seed Capital Scheme, full provision has been made. (c) Available for Sale: (i) Investments which do not fall within the Units of mutual fund are valued at (xii)  above two categories are categorized repurchase price as per relevant RBI under Available for Sale. The individual guidelines. 15 Annual Report 2018-19 (xiii)  The unquoted fixed income securities contracts at contracted rupee amount are reported (other than government securities) are on the Balance Sheet date. valued on Yield to Maturity (YTM) basis with appropriate mark-up over the YTM 6. LOANS AND ADVANCES rates for Central Government securities i. Assets representing loan and other assistance of equivalent maturity. Such mark-up and portfolios are classified as performing and YTM rates applied are as per the relevant non-performing based on the RBI guidelines. rates published by FBIL. Provision for non-performing assets is made in accordance with the RBI guidelines. 4. FOREIGN CURRENCY TRANSACTIONS ii. Advances stated in the Balance Sheet are net of Foreign currency transactions are recorded in the provisions made for non-performing advances, books of account in respective foreign currencies and restructured assets. at the exchange rate prevailing on the date of transaction. Accounting for transactions involving iii. General provision on Standard Assets is made foreign exchange is done in accordance with as per RBI guidelines. Accounting Standard (AS)-11 issued by Institute of Chartered Accountants of India, as per following iv. Floating provision is made and utilized as per provisions: RBI guidelines and Board approved policy. (i) Contingent liability in respect of outstanding 7. TAXATION forward exchange contracts is calculated at the (i) Tax expense comprises both current tax and contracted rates of exchange and in respect of deferred taxes. Current income tax is measured guarantees; acceptances, endorsements and at the amount expected to be paid to the tax other obligations are calculated at the closing authorities in accordance with Income Tax exchange rates notified by Foreign Exchange Act,1961 and the Income Computation and Dealers’ Association of India (‘FEDAI’). Disclosure Standards (ICDS). (ii) Foreign currency Assets and Liabilities are (ii) Deferred income taxes reflect the impact of the translated at the closing exchange rates notified current year timing differences between taxable by FEDAI as at the Balance Sheet date income and accounting income for the year and reversal of timing differences of earlier years. (iii) Foreign currency Income and Expenditure Deferred tax is measured based on the tax items are translated at monthly intervals rates and the tax laws enacted or substantively through actual sale/purchase and recognized enacted at the balance sheet date. in the profit & loss account accordingly. Deferred tax assets are recognized only to (iii)  (iv) The revaluation difference on foreign currency the extent that there is reasonable certainty LoC is adjusted and recorded in a special that sufficient future taxable income will be account opened and maintained, in consultation available against which such deferred tax with GOI for managing exchange risk. assets can be realized. Unrecognized deferred (v) The Bank follows hedge accounting in respect assets of earlier years are re-assessed and of foreign exchange contracts and derivative recognized to the extent that it has become transactions as per RBI guidelines. reasonably certain that future taxable income will be available against which such deferred Exchange differences arising on the settlement (vi)  tax assets can be realized. of monetary items are recognized as income or expense in the period in which they arise. (iv) Disputed taxes not provided for including departmental appeals are included under Outstanding Forward Exchange Contracts (vii)  Contingent Liabilities. which are not intended for trading are revalued at closing FEDAI rates. 8. SECURITISATION i. The Bank purchases credit rated Micro, Small 5. DERIVATIVES and Medium Enterprises Asset pools from The Bank presently deals in currency derivatives Banks / Non-Banking Finance Companies by viz., Cross Currency Interest Rate Swaps for way of pass- through certificates issued by the hedging its foreign currency liabilities. Based on Special Purpose Vehicle. Such securitization RBI guidelines, the above derivatives undertaken transactions are classified as Investments under for hedging purposes are accounted on an accrual Held for Trading / Available for Sale category basis. Contingent Liabilities on account of derivative depending upon the investment objective. 16 Annual Report 2018-19 APPENDIX-I ii. The Bank purchases credit rated pool of iii. Actuarial gains or losses are recognized in Micro, Small and Medium Enterprises assets the profit & loss account based on actuarial under bilateral direct assignment. Such direct valuations for the period in which they assignment transactions are accounted for as occur. ‘advances’ by the Bank. iv. New Pension Scheme is a defined contribution iii. The Bank enters into sale of Loans & Advances scheme and is applicable to employees who through direct assignment. In most of the have joined bank on or after December 01, 2011. cases, the Bank continues to service the Loans Bank pays fixed contribution at pre-determined & Advances sold under these transactions and rate and the obligation of the Bank is limited is entitled to the Residual interest on the Loans to such fixed contribution. The contribution is & Advances sold. Assets sold under direct charged to Profit & Loss Account. assignment are derecognized in the books of the Bank based on the principle of surrender of v. Actuarial gains/losses are immediately control over the assets. taken to the profit & loss account and are not deferred. iv. The residual income on the Loans & Advances sold is being recognized over the life of the vi. Payments made under the Voluntary underlying Loans & Advances. Retirement Scheme are charged to the Profit & Loss account in the year of expenses incurred. v. Security Receipts issued by the asset reconstruction companies are valued in B] Benefits (Short – term) while in service accordance with the guidelines applicable to Liability on account of Short-term benefits such instruments, prescribed by RBI from time are determined on an undiscounted basis and to time. recognized over the period of service, which entitles the employees to such benefits. SALE OF FINANCIAL ASSETS TO 9.   ASSET RECONSTRUCTION COMPANIES (ARCs): 11. FIXED ASSETS AND DEPRECIATION i. The sale of NPA’s is on cash basis or investment a) Fixed Assets are stated at cost of acquisition in Security Receipt (SR) basis. In case of sale on less accumulated depreciation and impairment SR basis, the sale consideration or part thereof losses, if any. is treated as investment in the form of SRs. b) Cost of asset includes purchase cost and all ii. The assets if sold at a price below the Net Book expenditure incurred on the asset before put Value (NBV) (i.e. book value less provisions to use. Subsequent expenditure incurred on held), the shortfall is debited to the Profit & Loss assets put to use is capitalized only when it A/c. In case the sale value is higher than NBV, increases the future benefits from such assets the excess provision held can be reversed to or their functioning capability. profit & loss account in the year the amounts are received. Reversal of excess provision is c) Depreciation for the full year, irrespective of limited to the extent to which cash received date of capitalization, is provided on: exceeds the NBV of the asset. (i) Furniture and fixture: For assets owned by 10. PROVISIONING FOR STAFF BENEFITS Bank @ 100 percent A] Post retirement benefits: (ii) Computer and Computer Software @ 100 i. Provident Fund is a defined contribution percent scheme administered by the Bank and the (iii) Building @ 5 percent on WDV basis contributions are charged to the Profit & Loss Account. (iv) Electrical Installations: For assets owned by Bank @ 50 percent on WDV basis. ii. Gratuity liability and Pension liability are (v) Motor Car - Straight Line Method @ 50 defined benefit obligations and other long- percent. term employee benefits like compensated absences, post-retirement medical benefits, d) Depreciation on additions is provided for full leave fare concession etc. are provided based year and no depreciation is provided in the year on the independent actuarial valuation as at of sale/disposal. the Balance Sheet date using the projected unit credit method as per AS 15 (Revised 2005) - e) Leasehold land is amortized over the period of Employee Benefits. lease. 17 Annual Report 2018-19 12.  PROVISION FOR CONTINGENT LIABILITIES AND SCHEDULE XVI - NOTES TO ACCOUNTS CONTINGENT ASSETS 1 Implementation of Ind-AS: In accordance with AS-29 Provisions, Contingent As per RBI circular dated August 04, 2016 SIDBI has Liabilities and Contingent Assets, the Bank to comply with the Indian Accounting Standards recognizes provisions involving substantial degree (Ind-AS) for financial statements for accounting of estimation in measurement when it has a present periods beginning from April 1, 2018 onwards and obligation as a result of past event, it is probable submit proforma Ind-AS financial statements to RBI that there will be an outflow of resources and a from the half-year ended September 30, 2016. A reliable estimate can be made of the amount of the Screening Committee comprising of Senior Officers obligation. Contingent Assets are neither recognized has been constituted who provide guidance and nor disclosed in the financial statements. Contingent oversees the progress of implementation of Ind-AS liabilities are not provided for and are disclosed in the in the Bank. The Proforma Financial Statements balance sheet and details given by way of Schedule from half year ended September 30, 2016 till the to the Balance Sheet. Provisions, contingent liabilities half year ended September 30, 2018, have been and contingent assets are reviewed at each Balance submitted to RBI. At present, SIDBI is making use Sheet date. of Excel sheets for conversion of IGAAP Financial 13. GRANTS AND SUBSIDIES Statements into Ind-AS compliant stand-alone and consolidated Financial Statements. SIDBI has Grants and subsidies from the Government and written to RBI seeking clarification on methodology other agencies are accounted as per the terms and of calculation of Expected Credit Loss (ECL) and conditions of the agreement. for seeking formats of Ind-AS compliant Financial 14. OPERATING LEASE Statements for which RBI reply is still awaited. Lease rentals is recognized as an expense/income Pending receipt of Ind-AS formats & guidance in the Profit & Loss Account as they become due for from RBI as also pending clarification from RBI payments. regarding deferment of implementation of Ind-AS for AIFIs and consequent modification in Balance 15. IMPAIRMENT OF ASSETS Sheet format prescribed under Regulation 14 (i) The carrying amounts of assets are reviewed at of the Small Industries Development Bank of India each Balance Sheet date, if there is any indication General Regulations,2000, the annual financial of impairment based on internal/external factors, to statements is continued to be prepared under recognize, IGAAP. RBI has been kept informed in this regard. a) the provision for impairment loss, if any required; or 2.1 As per the Accounting Standard 22, Accounting for Taxes on Income, the Bank has reviewed the b) the reversal, if any, required for impairment loss Deferred Tax Expenditure / Saving and recognized recognized in the previous periods. an amount of ` 54,36,89,736 as Deferred Tax Impairment loss is recognized when the carrying Asset (Previous year - Deferred Tax Liability was amount of an asset exceeds recoverable amount. ` 58,23,24,762) in the Profit & Loss Account for the year ended March 31, 2019. During the year the bank 16. CASH AND CASH EQUIVALENTS has for the first time recongised Deferred Tax Asset Cash and cash equivalents for the purpose of cash amouting to ` 1,65,77,82,586/- on carried Forward flow statement include cash in hand, balances with RBI, Long Term Capital Losses, Provision for Non balances with other banks and investment in Mutual Fund Performing Investments and provision on Standard with an original maturity of three months or less. Assets made during the current FY 2018-19. 18 Annual Report 2018-19 APPENDIX-I 2.2 The Break up of Deferred Tax Asset/ (Liability) as on March 31, 2019 is as under: (Amount in `) Timing Difference Deferred Tax Asset/(Liability) March 31, 2019 March 31, 2018 a) Provision for Depreciation 39,60,413 (1,21,30,753) b) Special Reserve u/s 36(1)(viii) of the Income Tax Act 1961 (4,70,90,89,576) (4,44,78,09,616) c) Provisions for Bad & Doubtful Debts 2,30,45,14,771 2,53,21,09,985 d) Amortisation of Premium received on Issued on GOI Bonds (4,44,56,921) (5,86,23,034) e) Provision for Restructuring of Accounts 1,22,49,123 1,66,89,571 f) Brought Forward Long Term Capital Loss 22,05,17,373 - g) Provision for Non Performing Investment 85,10,68,097 - h) Provision for Standard Assets 58,61,97,116 - i) Others 51,79,10,890 1,16,89,45,396 Net deferred tax Asset/(Liability) (25,71,28,714) (80,08,18,451) 3 Provision for Income Tax includes: (Amount in `) Sr. No. Particulars March 31, 2019 March 31, 2018 (i) Current Income Tax Provision 6,10,49,78,330 4,78,49,10,162 (ii) Short/(Excess) Income Tax Provision of Earlier Years (4,85,09,317) (3,49,34,701) The Tax Liability has been vetted by Tax consultant. 4 Contigent Liabilities referred to in Schedule XI (i):As compiled and certified by the Management: Contingent liabilities of ` 6,98,13,20,359 (Previous Year ` 3,53,80,94,592) represents income tax / service tax /  legal cases filed against SIDBI. This is being disputed by the Bank and based on expert’s opinion, the provision is not considered necessary. It includes an amount of ` 1,63,32,91,167 (Previous Year ` 1,63,32,91,167) pertaining to appeals filed by Income Tax Department against the Bank. 5 ‘Bonds and Debentures’ under Borrowings in schedule IV includes the following: (Amount in `) March 31, 2019 March 31, 2018 a) Unsecured Bonds 1,44,95,50,00,000 1,65,49,00,00,000 6 Expenditure to the extent not written off’ under Other Assets in schedule X includes the following: (Amount in `) March 31, 2019 March 31, 2018 a) Premium on transfer of RBI NIC(LTO) to GoI Bonds 12,70,85,209 16,92,53,445 b) Discount paid in Advance Certificate of Deposit 6,73,24,68,721 4,41,28,19,648 c) Discount paid in Advance - Commercial Paper 56,66,99,947 95,13,63,287 d) Expenditure on Issuance of Unsecured Bonds 2,97,09,294 2,36,28,226 Total 7,45,59,63,171 5,55,70,64,606 7 Interest and Financial Charges (Amount in `) March 31, 2019 March 31, 2018 a) Interest on Borrowings 28,72,48,01,168 17,36,82,65,296 b) Interest on Deposits 34,90,93,38,998 17,28,27,64,801 c) Financial Charges 5,39,59,71,840 6,17,48,14,710 Total 69,03,01,12,006 40,82,58,44,807 19 Annual Report 2018-19 (Amount in `) 8 March 31, 2019 March 31, 2018 Estimated amount of contracts remaining to be executed on 2,92,86,993 1,02,46,63,903 Capital Account not provided for (net of advance paid) 9 Premises in Schedule IX include advances towards acquisition of Premises ` 11,06,68,896 (Previous Year ` 11,06,68,896) and Capital Work in Progress ` 18,59,429 (Previous Year ` 3,83,22,688). The advance towards acquisition of Premises ` 11,06,68,896 was paid towards acquisition of office premises, proposal of which was subsequently cancelled. The Bank is in correspondence with the Agency for refund of the advance amount. The issue has been taken up with the concerned Govt. department. The deal has not been officially cancelled. Hence the amount is not considered doubtful. 10 In respect of foreign currency borrowings of JPY 30 billion (JPY 10.24 billion as on March 31, 2019) under Line V from Japan International Cooperation Agency (JICA) (previously known as Japan Bank of International Cooperation- JBIC), Exchange Rate Fluctuation Fund (ERFF) has been created as per terms agreed with Government of India (GOI) and included in Foreign Currency Fluctuation Reserve Fund. Applicable interest at notified rate is credited to this ERFF account and interest payable to JICA at contracted rate is debited out of this account. Also, half yearly compounding is calculated on the opening balance in ERFF account at notified rate. The difference on account of exchange fluctuation arising on principal account amounting to ` 2,68,24,49,630.06 (Previous Year ` 3,48,90,46,842) has been netted off against ERFF as permitted by the Government of India. Adjustment to the Fund Account, if necessary, will be made as per directions of Government of India in future. In case, the balance in the Fund is insufficient, the claim will be on Government of India. As the present balance under ERFF is expected to take care of debt servicing and exchange rate fluctuations, further contribution to the ERFF has been discontinued till such time the ERFF balance remains surplus vis a vis the loan outstanding under JICA-V LoC. 11 The borrowing of ` 2,18,04,44,418 (Previous Year ` 2,61,65,33,300) from Govt. of India under the JICA IV loan is carried forward in the ‘schedule IV - Borrowings’ to the Balance Sheet at its historic rupee value since SIDBI’s liability towards principal repayment under the agreement, is not expected to exceed the aggregate of rupee borrowings and the balance in the ERFF maintained for this loan. Applicable interest at 8% is credited to this ERFF account and interest payable in JPY (converted to equivalent INR) is debited out of this account. The balance as on March 31, 2019 in ERFF maintained for this loan is ` 2,07,46,84,419 (Previous Year ` 2,50,24,79,068). 12 The Bank has contracted a line of credit for USD 300 million from World Bank for scaling up Sustainable and Responsible Micro Finance Project including IDA portion aggregating SDR 65.9 million (equivalent of USD 100 million). Under IDA line, Govt. of India is the borrower and rupee funds are lent to SIDBI by GOI though the exchange risk on the underlying is required to be borne by SIDBI as per the terms of the agreement. Thus, though GOI released rupee funds to SIDBI, the same was recorded as SDR liability in the books of SIDBI to depict correct position so that revaluation difference gets suitably reflected in the year end figures. Accordingly, the drawal effected under the above line aggregating SDR 52.72 million (equivalent to ` 506.09 crore) as on March 31,2019 [Previous Year SDR 56.02 million (equivalent to ` 532.30 crore)] from GOI is recorded as SDR liability and the underlying liability has been hedged by way of Cross Currency Interest Rate Swaps. The same has been grouped under schedule IV - ‘Borrowings in India’. 13 a) Government of India (GOI) has created “India Microfinance Equity Fund (IMEF)” with SIDBI with a corpus of ` 300 crore. The Fund shall be utilised for extending equity or any other form of capital to Tier – II and Tier – III NBFC MFIs and all Non-NBFC MFIs, with a focus on smaller socially oriented MFIs with the objective of poverty alleviation and achieving long term sustainability of operations in unserved and underserved parts of the country. “The fund is operated/managed by SIDBI for which an administrative fee for managing the fund is received by SIDBI. Further, the inflows and outflows are debited/credited to the fund. Hence, fund balance of IMEF, net of investment is grouped under “Other Liabilities” in the Balance Sheet and all gains/losses/income/ expenditure are the part of the fund. The balance in the fund is ` 2,39,72,13,696 as on March 31 2019 (Previous year ` 2,16,42,49,205). 20 Annual Report 2018-19 APPENDIX-I b) ASPIRE Fund is a ` 310 crore Fund of Funds, allocated by Ministry of Micro, Small & Medium Enterprises, Government of India, to be managed by SIDBI. The Fund would be utilized to make investment in Venture Capital Funds targeting Start Ups/ early stage enterprises promoting Innovation, Entrepreneurship, Forward Backward linkage with multiple value chain of manufacturing and service delivery, accelerator support, etc. in the Agro based Industry and sectors to galvanize the rural economy. The entire corpus of ` 310 crore has been released by Government, out of which ` 210 crore has been released during the FY 2019. These investments (out of ASPIRE fund) are held by SIDBI in fiduciary capacity. The fund balance of ASPIRE Fund, net of investment is grouped under “Other Liabilities” in the Balance Sheet and all gains/losses/income/expenditure are the part of the fund. The balance in the fund is ` 2,88,16,92,244 as on March 31 2019 (Previous year ` 90,49,90,811). c) Government of India has formulated a Scheme for Fund of Funds for Startups (FFS) with the principal objective of enhancing the equity availability to Startups. Under the Scheme, an amount of ` 10,000 crore has been proposed as FFS to be managed by SIDBI. The Government has since released an amount of ` 600 crore to SIDBI and also permitted to take further commitments of ` 1600 crore. During the year, Government has advised SIDBI to continue to commitment to the Alternative Investment Fund(AIF). These investments (out of FFS) are held by SIDBI in fiduciary capacity. The fund balance of FFS, net of investment is grouped under “Other Liabilities” in the Balance Sheet and all gains/losses/income/expenditure are the part of the fund. The balance in the fund is ` 2,58,51,15,337 as on March 31 2019 (Previous year ` 5,10,77,99,574). 14 The Bank has pledged Government Securities aggregating to face value ` 4,52,82,00,000 (book value ` 4,46,80,73,744) [Previous Year ` 4,52,82,00,000 (book value ` 4,71,36,68,932)] with Clearing Corporation of India Ltd. for Triparty Repo Dealing and Settlement (TREPS). 15 As a part of hedging strategy, the Bank has placed foreign currency deposits with scheduled commercial banks out of the funds drawn under various lines of credit and have availed overdraft facility in INR against these foreign currency deposits. Outstanding balances under these overdraft facility aggregated to ` 3,77,40,11,137 as on March 31, 2019 (Previous Year ` 5,14,97,50,157). As on March 31, 2019, the interest receivable on these foreign currency deposits matches with the interest payable on borrowings under various lines of credit. 16 Other income-Schedule XIII includes principal recoveries on account of advances written off in earlier years ` 36,79,23,266 (previous year ` 1,82,80,34,855). 17 The Bank has acquired certain freehold land from Government authorities. As per the practice prevailing for acquiring land from Land Development Authorities, the Bank has agreed to make payment of future claims, if any, received in respect of such land. Till date no claim has been received. 18 IFAD had extended a foreign currency loan to SIDBI of SDR 16.35 million, vide loan agreement dated February 18, 2002. As per the terms of loan agreement, IFAD had disbursed loan in USD and it is to be repaid in USD equivalent to SDR. The Bank has accounted accordingly in the books of account. The balance as on March 31, 2019 for this loan is ` 1,12,48,25,395 (Previous Year ` 1,16,52,80,010). 19 Employee Benefits In accordance with the Accounting Standard on “Employee Benefits” (AS 15) (Revised 2005) issued by the Institute of Chartered Accountants of India, the Bank has classified the various benefits provided to the employees as under: (a) Defined contribution plan The Bank has recognized the following amounts in Profit & Loss Account: (Amount in `) Particulars March 31, 2019 March 31, 2018 Employer’s contribution to Provident fund 8,45,92,109 5,83,87,971 Employer’s contribution to New Pension Scheme 2,27,84,810 1,91,20,772 21 Annual Report 2018-19 (b) The Bank is having defined benefit Pension Plans and Gratuity Scheme which are managed by the Trust. (` crore) Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 1. Assumptions Discount Rate 7.78% 7.72% 7.64% 7.73% Rate of Return on Plan Assets 7.78% 7.72% 7.64% 7.73% Salary Escalation 5.50% 6.00% 5.50% 6.00% Attrition rate 2.00% 2.00% 2.00% 2.00% 2. Table showing change in Benefit Obligation Liability at the beginning of the year 452.03 408.10 111.05 75.49 Interest Cost 34.94 29.42 8.59 5.50 Current Service Cost 12.05 12.73 4.47 5.27 Past Service Cost (Non Vested Benefit) - - - - Past Service Cost (Vested Benefit) - - - 31.43 Liability Transferred in - - - - (Liability Transferred out) - - - - (Benefit Paid) (24.25) - (12.40) (4.58) Actuarial (gain) / loss on obligations (35.12) 1.78 (20.35) (2.06) Liability at the end of the year 439.65 452.03 91.36 111.05 3. Tables of Fair value of Plan Assets Fair Value of Plan Assets at the beginning of the year 405.46 98.07 115.25 111.78 Expected Return on Plan Assets 31.34 7.07 8.43 8.15 Contributions - 300.00 0.05 - Transfer from other company - - - - (Transfer to other company) - - - - (Benefit Paid) (24.25) - (12.40) (4.58) Actuarial gain / (loss) on Plan Assets (2.32) 0.32 (0.35) (0.10) Fair Value of Plan Assets at the end of the year 410.23 405.46 110.98 115.25 4. Table of Recognition of Actuarial Gains/ Losses Actuarial (Gains)/ Losses on obligation for the period (35.12) 1.78 (20.35) (2.07) Actuarial (Gains)/ Losses on asset for the period 2.32 (0.32) 0.35 0.10 Actuarial (Gains)/ Losses recognized in Income & (32.80) 1.46 (20.00) (1.97) Expense Statement 5. Actual Return on Plan Assets Expected Return on Plan Assets 31.34 7.07 8.43 8.15 Actuarial Gain / (Loss) on Plan Assets (2.32) 0.32 (0.35) (0.10) Actual Return on Plan Assets 29.02 7.39 8.08 8.05 22 Annual Report 2018-19 APPENDIX-I (` crore) Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 6. Amount Recognised in the Balance Sheet Liability at the end of the year (439.65) (452.02) (91.36) (111.05) Fair Value of Plan Assets at the end of the year 410.23 405.46 110.98 115.25 Difference (29.42) (46.56) 19.62 4.20 Unrecognised Past Service Cost at the end of the year - - - - Unrecognised Transitional Liability at the end of the year - - - - Net Amount recognised in the Balance Sheet (29.42) (46.56) 19.62 4.20 7. Expenses Recognised in the Income Statement Current Service Cost 12.05 12.73 4.47 5.27 Interest Cost 34.94 29.42 8.59 5.51 Expected Return on Plan Assets (31.34) (7.07) (8.43) (8.15) Past Service Cost (Non Vested Benefit) recognised - - - - during the year Past Service Cost (Vested Benefit) recognised - - - 31.43 during the year Recognition of Transition Liability during the year - - - - Actuarial (Gain) / Loss (32.80) 1.46 (20.00) (1.97) Expense Recognised in Profit & Loss account (17.15) 36.54 (15.37) 32.09 8. Balance Sheet Reconciliation Opening Net Liability 46.57 310.02 (4.20) (36.29) Expense as above (17.15) 36.54 (15.37) 32.09 Employers Contribution - (300.00) (0.05) - Amount recognised in the Balance Sheet 29.42 46.56 (19.62) (4.20) 9. Other Details Salary escalation is considered as advised by the Bank which is in line with the industry practice considering promotion, demand and supply of the employees. Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 10. Category of Assets Government of India Assets - - - - Corporate Bonds - - - - Special Deposits Scheme - - - - Equity Shares of Listed Companies - - - - Property - - - - Issuer Managed Funds (LIC of India) 410.23 405.46 110.98 115.25 Other - - - - Total 410.23 405.46 110.98 115.25 23 Annual Report 2018-19 11. Experience Adjustment: Pension Gratuity FY FY FY FY FY FY FY FY FY FY 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 On Plan Liability (Gain)/Loss (22.03) 66.81 (5.53) 22.70 (0.90) 19.71 10.18 (7.91) (6.20) (0.56) On Plan Asset (Loss)/Gain (2.32) 0.32 0.58 (0.17) (1.43) (0.35) (0.10) 0.29 (0.40) 0.21 Note: As the closing balances in Pension and Graturity Fund are greater than the respective Actuarial liability as on March 31, 2019, no additional provision has been made during the current FY.  he following are the amount charged to Profit & Loss Account relating to other long term benefits plan (c) T based on the actuarial valuation provided by independent actuary. (Amount in `) Sr. No Particulars March 31, 2019 March 31, 2018 1 Ordinary Leave Encashment 20.63 11.84 2 Sick Leave - 5.49 3 Resettlement Expenses 0.88 - 4 Post Retirement Medical Scheme Facilities 0.43 (3.51) 20 Earnings Per Share (EPS) (AS-20)*: The Bank reports basic and diluted Earnings Per Share in accordance with AS 20. Basic Earnings per Share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding at the year end. Diluted Earnings per Share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the period. Diluted Earnings per Share is computed by dividing the net profit after tax by the sum of the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end. March 31, 2019 March 31, 2018 Net Profit considered for EPS calculation (`) 19,52,20,34,065 14,29,21,74,569 Weighted Average Number of equity shares of face value ` 10 each 53,19,22,031 53,19,22,031 Earning per share (`) 36.70 26.87 * Basic & Diluted EPS are same as there are no dilutive potential Equity Shares. 21 The proposed dividend (including dividend distribution tax) is accounted as liability in the books of accounts under Schedule V. 22 In the opinion of the Management, there is no material impairment of the fixed assets of the Bank in terms of Accounting Standard 28- Impairment of Assets. 23 Disclosures under Accounting Standard 29 for provisions in contingencies. The salary & allowances of the employees of the Bank are reviewed every five years. Such review is due from November 01, 2017. Particulars FY 2019 FY 2018 Wage Arrears/ Other Wage Arrears/ Other Incentive (`) Provisions (`) Incentive (`) Provisions (`) Opening Balance 1,87,31,68,333 4,71,960 1,72,11,68,333 4,71,960 Additions: Arrears 34,00,00,000 - 16,00,00,000 - Incentive - - - - Utilisations: 1,43,16,70,278 Write back 44,14,98,055 - 80,00,000 - Closing Balance 34,00,00,000 4,71,960 1,87,31,68,333 4,71,960 Other Provisions represents claims filed against the Bank in the normal course of business relating to various legal cases and other claims. 24 Annual Report 2018-19 APPENDIX-I 24 The Bank has put in place a mechanism to manage credit risk arising out of unhedged foreign currency exposures (UFCE) of its borrowers. A review of the UFCE across its portfolio is undertaken by the Bank on periodic basis. In terms of RBI circular DBOD No. BP.BC.85/21.06.200/2013-14 dated 15.01.2014 & subsequent clarification vide circular DBOD NO.BP.BC. 116/21.06.200/2013-14 dated 03.06.2014, based on available data, the provision for UFCE works out to ` 0.15 crore as on March 31, 2019 (Previous year ` 0.17 crore) which has been included under provisions for standard assets under Schedule V. 25 As per the practice consistently followed, redemption in Venture Capital Funds is accounted as per the distribution letter received from Venture Capital Funds, irrespective of the appropriation policy as specified in the contribution agreement. Investments in units/ shares in Venture Capital Funds is subject to confirmation/ reconciliation. 26 Investor’s Complaints: As on 1st April, 2018 the Bank had “1” pending investor’s complaints for disposal. During the current financial year “25” complaints were received from Investors and “25” complaints (including the “1” complaint pending on April 01, 2018) were disposed off during the year. Thus, “1” complaint is pending for disposal as on March 31, 2019. 27 Liability on account of Indirect Tax (Service Tax/GST) is recognized on the basis of return filed/assessment completed. 28 Some of the balances of current liabilities are subject to confirmation and consequential adjustment if any. Further, balances in certain GL codes with their respective SL are under reconciliation, which will have no material impact. Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances for MSME Borrowers 29  registered under Goods and Services Tax (GST): As per RBI circular dated January 01, 2019 for restructuring of advances for Micro, Small and Medium Enterprises (MSME) Borrowers registered under Goods and Services Tax (GST) and also fulfilling other condition as prescribed in the said RBI circular, the MSME accounts restructured under the scheme are as under: No. of accounts restructured Amount (` in crore) 73 171.35 30  Regulation 14 of Small Industries Development Bank of India General Regulations, 2000 prescribes separate format for presentation of accounts under Small Industries Development Assistance Fund(SIDAF) and General Fund. As no separate SIDAF has been notified by the Central Government, the same is not being maintained by SIDBI. 31  The Bank has long term contracts mainly in nature of derivative contracts which are assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required, for material foreseeable losses on such long term contracts in the books of account. 32  Previous year’s figures have been re-grouped and re-classified wherever necessary to make them comparable with the current years figures. 25 Annual Report 2018-19 Additional Disclosures as per RBI Guidelines 1. Capital adequacy (` crore) Sr. No Particulars FY 2018-19 FY 2017-18 i) Common Equity* Not Applicable Not Applicable ii)       Additional Tier 1 capital* Not Applicable Not Applicable iii) Total Tier 1 capital 15757.23 14038.50 iv) Tier 2 capital - - v)      Total Capital (Tier 1+Tier 2) 15757.23 14038.50 vi) Total Risk Weighted Assets (RWAs) 58114.11 52523.92 vii)    Common Equity Ratio Not Applicable Not Applicable (Common Equity as a percentage of RWAs) * viii)   Tier 1 Ratio (Tier 1 capital as a percentage of RWAs) 27.11% 26.73% ix)     Capital to Risk Weighted Assets Ratio (CRAR) 27.11% 26.73% (Total Capital as a percentage of RWAs) x)      Percentage of the shareholding of the Government of India 15.40 15.40 xi)     Amount of equity capital raised - - xii) Amount of Additional Tier 1 capital raised; of which - - a) Perpetual Non-Cumulative Preference Shares (PNCPS): - - b) Perpetual Debt Instruments (PDI) - - xiii) Amount of Tier 2 capital raised; of which - - a) Debt capital instruments: - - b) Perpetual Cumulative Preference Shares (PCPS) - - c) Redeemable Non-Cumulative Preference Shares (RNCPS) - - d) Redeemable Cumulative Preference Shares (RCPS) - - * The figures are not being calculated at present, since BASEL-III is not applicable. 2. Free Reserves and Provisions (a) Provision on Standard Assets (` crore) Particulars FY 2018-19 FY 2017-18 Provisions towards Standard Assets (cumulative) 550.58 382.82 (b) Floating Provisions (` crore) Particulars FY 2018-19 FY 2017-18 Opening balance in the floating provisions account 1,742.21 2,057.81 The quantum of floating provisions made in the accounting year - - Amount of draw down made during the accounting year* 393.68 315.60 Closing balance in the floating provisions account 1,348.53 1,742.21 * Amount was utilised for making NPA/NPI provisions as per the Bank’s Board approved policy on floating provision 26 Annual Report 2018-19 APPENDIX-I 3. Asset Quality and specific provisions (a) Non-Performing Advances (` crore) Particulars FY 2018-19 FY 2017-18 (i) Net NPAs to Net Advances (%) 0.21% 0.26% (ii) Movement of NPAs (Gross) (a)    Opening balance 902.42 823.28 (b)    Additions during the year 308.38 424.42 (c)    Reductions during the year 342.89 345.28 (d)    Closing balance 867.91 902.42 (iii) Movement of Net NPAs * (a)    Opening balance 250.63 302.25 (b)    Additions during the year 107.40 28.62 (c)    Reductions during the year 65.48 80.24 (d)    Closing balance 292.55 250.63 (iv) Movement of provisions for NPAs (excluding provisions on standard assets) (a)    Opening balance 651.78 521.03 (b)    Provisions made during the year 201.51 408.70 (c)    Write of / write back of excess provisions 277.94 277.95 (d)    Closing balance 575.35 651.78 * The Net NPA will be NIL for the current year and previous year, if the amount of floating provision is adjusted against the same. (b) Non-Performing Investments (` crore) Particulars FY 2018-19 FY 2017-18 (i) Net NPIs to Net Investments (%) 8.03% - (ii) Movement of NPIs (Gross) (a)    Opening balance 410.03 419.60 (b)    Additions during the year 955.69 9.81 (c)    Reductions during the year 73.55 19.38 (d)    Closing balance 1,292.17 410.03 (iii) Movement of Net NPIs (a)    Opening balance - - (b)    Additions during the year 708.44 - (c)    Reductions during the year - - (d)    Closing balance 708.44 - (iv) Movement of provisions for NPIs (excluding provisions on standard assets) (a)    Opening balance 410.03 419.60 (b)    Provisions made during the year 247.25 9.81 (c)    Write of / write back of excess provisions 73.55 19.38 (d)    Closing balance 583.73 410.03 27 Annual Report 2018-19 (c) Non-Performing Assets (a+b) (` crore) Particulars FY 2018-19 FY 2017-18 (i) Net NPAs to Net Assets (Advances + investments) (%) 0.69% 0.24% (ii) Movement of NPAs (Gross Advances + Gross investments) (a)    Opening balance 1,312.45 1,242.88 (b)    Additions during the year 1,264.07 434.23 (c)    Reductions during the year 416.44 364.66 (d)    Closing balance 2,160.08 1,312.45 (iii) Movement of Net NPAs (a)    Opening balance 250.63 302.25 (b)    Additions during the year 815.83 28.62 (c)    Reductions during the year 65.48 80.24 (d)    Closing balance 1,000.98 250.63 Movement of provisions for NPAs (iv)  (excluding provisions on standard assets) (a)    Opening balance 1,061.81 940.63 (b)    Provisions made during the year 448.77 418.51 (c)    Write of / write back of excess provisions 351.49 297.33 (d)    Closing balance 1,159.09 1,061.81 28 Annual Report 2018-19 3 (d) Accounts Restructured Disclosure of Restructured Accounts (` crore) Sl Type of Restructuring  Under CDR Mechanism Under SME Debt Restructuring Mechanism Others Total Asset Classification  Standard Sub- Doubtful Loss Total Standard Sub- Doubtful Loss Total Standard Sub- Doubtful Loss Total Standard Sub- Doubtful Loss Total Details  Standard Standard Standard Standard 1 Restructured No. of Borrowers - - 1 - 1 - - - - - 15 12 31 - 58 15 12 32 - 59 Accounts as on Amount - - 37.19 - - - - - - 74.69 57.78 98.32 - 230.79 74.69 57.78 135.51 - 267.98 April 1 of the FY outstanding 37.19 (opening figures)* Provision thereon - - - - - - - - - - (0.08) 0.23 0.48 - 0.63 (0.08) 0.23 0.48 - 0.63 2 Fresh restructuring No. of Borrowers - - - - - - - - - - 14 8 1 - 23 14 8 1 - 23 during the year Amount - - - - - - - - - - 57 9 5 - 71.22 56.93 9.49 4.80 - 71.22 outstanding Provision thereon - - - - - - - - - - 0 0 - - 0.41 0.26 0.15 - - 0.41 3 Upgradations No. of Borrowers - - - - - - - - - - 2 - (2) - - 2 0 (2) - - to restructured Amount - - - - - - - - - - 2 - (2) - - 2.02 (0.05) (1.97) - - standard category outstanding during the FY Provision thereon - - - - - - - - - - - - - - - 0.04 - (0.04) - - 4 Restructured No. of Borrowers - - - - (9) (9) (9) (9) standard advances Amount - - - - (28) (28.16) (28.16) (28.16) which cease to outstanding attract higher Provision thereon - - - - - (0.05) (0.05) (0.05) provisioning and / or additional risk weight at the end of the FY and hence need not be shown as restructured standard advances at the beginning of the next FY 5 Downgradations No. of Borrowers - - - - - - - - - - (1) (7) 8 - - (1) (7) 8 - - of restructured Amount - - - - - - - - - - (11) (57) 68 - - (11.01) (57.31) 68.32 - - accounts during outstanding the FY Provision thereon - - - - - - - - - - - - - - - - (0.11) 0.11 - - 6 Write-offs of No. of Borrowers - - (1) - (1) - - - - - (1) (2) (4) - (7) (1) (2) (5) - (8) restructured Amount - - (37) - (37) - - - - - (15) (21) (21) - (57.41) (15.27) (21.03) (58.30) - (94.60) accounts during outstanding the FY# Provision thereon - - - - - - - - - - - - - - (0.45) - (0.04) (0.40) - (0.45) 7 Restructured No. of Borrowers - - - - - - - - - - 20 11 34 - 65 20 11 34 - 65 Accounts as on Amount - - - - - - - - - - 79.19 (11.12) 148.36 - 216.43 79.19 (11.12) 148.36 - 216.43 March 31 of the FY outstanding Annual Report 2018-19 (closing figures)* Provision thereon - - - - - - - - - - 0.17 0.22 0.15 - 0.55 0.17 0.22 0.15 - 0.55 * Excluding the figures of Standard Restructured Advances which do not attract higher provisioning or risk weight (if applicable). APPENDIX-I 29 Note: Figures at Sr. No.6 includes ` 28.92 crore (33 borrower & provisions of ` 0.45 crore) which is reduction/recovery from existing restructured accounts and closure of 5 borrower amounting to `16.09 crore by way of recovery. # Incluiding reduction of restructure account. (e) Movement of Non-performing assets (` crore) Particulars FY 2018-19 FY 2017-18 Gross NPAs as on April 01, 2018 902.42 823.28 Additions (Fresh NPAs) during the year 308.38 424.42 Sub total (A) 1,210.80 1,247.70 Less:- (i) Upgradations 8.46 17.15 (ii) Recoveries (excluding recoveries made from upgraded accounts) 112.54 133.45 (iii) Technical / Prudential Write offs 221.79 187.75 (iv) Write offs other than those under (iii) above* 0.10 6.93 Sub-total (B) 342.89 345.28 Gross NPAs as on March 31, 2019 (A-B) 867.91 902.42 (f) Write-offs and recoveries (` crore) Particulars FY 2018-19 FY 2017-18 Opening balance of Technical / Prudential written off accounts as 1,458.52 1,573.68 at April 1, 2018 Add: Technical / Prudential write offs during the year 221.79 187.75 Sub total (A) 1,680.31 1,761.43 Less: Actual write off 87.51 1.81 Less: Recoveries made from previously technical / prudential 29.51 301.10 written off accounts during the year Sub total (B) 117.02 302.91 Closing balance as at March 31, 2019 (A-B) 1,563.29 1,458.52 (g) Overseas Assets, NPAs and Revenue Particulars FY 2018-19 FY 2017-18 Total Assets Nil Nil Total NPAs Nil Nil Total Revenue Nil Nil 30 Annual Report 2018-19 APPENDIX-I (h) Depreciation and provisions on investments (` crore) Particulars FY 2018-19 FY 2017-18 (1) Investments (i)    Gross Investments 9,407.09 9,661.54 (a) In India 9,407.09 9,661.54 (b) Outside India - - (ii) Provisions for Depreciation 588.90 459.42 (a) In India 588.90 459.42 (b) Outside India - - (iii) Net Investments 8,818.19 9,202.12 (a) In India 8,818.19 9,202.12 (b) Outside India - - Movement of provisions held towards depreciation on (2)  investments (i) Opening balance 49.38 48.14 (ii) Add: Provisions made during the year 6.36 4.21 Appropriation, if any, from Investment Fluctuation Reserve (iii)  - - Account during the year Less: Write off / write back of excess provisions during (iv)  - 2.97 the year (v) Less: Transfer, if any, to Investment Fluctuation Reserve 50.58 Account* (vi) Closing balance 5.16 49.38 * Transfer to Investment Fluctuation Reserve is net of provision of ` 44.22 crore made during FY 2018-19 and Nil made during FY 2017-18. (i) Provisions and Contingencies (` crore) Break up of ‘Provisions and Contingencies’ shown under the head FY 2018-19 FY 2017-18 Expenditure in Profit and Loss Account Provisions for depreciation/NPI on Investment (98.61)# (8.33)# Provision towards NPA (1.32)# - Provision made towards Income tax 551.28 533.23 (Including Deferred Tax Assets/Liability) Other Provision and Contingencies (with details) 97.44 $ 53.00$ # Net of write back of floating provision. $ includes provision for standard asset. (j) Provisioning Coverage Ratio (PCR) FY 2018-19 FY 2017-18 Provisioning Coverage Ratio (PCR)* 87% 89% * Floating provision has not been considered while calculating PCR. 31 Annual Report 2018-19 (k) Disclosures on Flexible Structuring of Existing Loans (` crore) Period No. of Amount of loans taken up for Exposure weighted average borrowers flexible structuring duration of loans taken up for taken up flexible structuring for flexibly Classified as Classified as Before After applying structuring Standard NPA applying flexible flexible structuring structuring Previous Year FY 2017-18 Nil Nil Nil Nil Nil Current Year FY 2018-19 Nil Nil Nil Nil Nil  isclosures on Strategic Debt Restructuring Scheme (accounts which are currently under the stand-still (l) D period) (` crore) No. of accounts where Amount outstanding as Amount outstanding as Amount outstanding as SDR has been invoked on the reporting date on the reporting date on the reporting date with respect to accounts with respect to accounts where conversion of debt where conversion of debt to equity is pending to equity has taken place Classified Classified Classified Classified Classified Classified as standard as NPA as standard as NPA as standard as NPA Nil Nil Nil Nil Nil Nil Nil  Disclosures on Change in Ownership outside SDR Scheme (accounts which are currently under the (m)  stand-still period) No. of Amount outstanding as Amount outstanding Amount outstanding Amount outstanding accounts on the reporting date as on the reporting as on the reporting as on the reporting where date with respect date with respect date with respect banks to accounts where to accounts where to accounts where have conversion of debt to conversion of debt to change in ownership is decided equity/invocation of equity/invocation of envisaged by issuance to effect pledge of equity shares pledge of equity shares of fresh shares or sale change in is pending has taken place of promoters equity ownership Classified Classified Classified Classified Classified Classified Classified Classified as standard as NPA as standard as NPA as standard as NPA as standard as NPA Nil Nil Nil Nil Nil Nil Nil Nil Nil  isclosures on Change in Ownership of Projects Under Implementation (accounts which are currently under (n) D the stand-still period) No. of project loan accounts Amount outstanding as on the reporting date where banks have decided to Classified as standard Classified as standard Classified as NPA effect change in ownership restructured Nil Nil Nil Nil (o) Disclosures on the Scheme for Sustainable Structuring of Stressed Assets (S4A), as on March 31, 2019. No. of accounts where S4A has Aggregate Amount outstanding Provision been applied amount Held outstanding In Part A In Part B Classified as Standard Nil Nil Nil Nil Classified as NPA Nil Nil Nil Nil 32 Annual Report 2018-19 APPENDIX-I 4. Investment portfolio: constitution and operations (a) Repo Transactions Minimum Maximum Daily Average Outstanding outstanding outstanding outstanding as on March during the during the during the 31, 2019 year year year Securities sold under repo i. Government securities Nil Nil Nil Nil ii. Corporate debt securities Nil Nil Nil Nil Securities purchased under reverse repo i. Government securities Nil Nil Nil Nil ii. Corporate debt securities Nil Nil Nil Nil (b) Disclosure of Issuer Composition for Investment in Debt Securities (` crore) Amount of Investment Below Unrated Unlisted Issuer Amount made through Investment securities securities private Grade held placement Securities Held (1) (2) (3) (4) (5) (6) (i) PSUs 518.58 - - - - (ii) FIs 1,224.42 96.94 - 78.55 103.00 (iii) Banks 3,385.50 25.00 - 103.50 103.50 (iv) Private Corporates 613.30 197.15 - 385.40 345.84 (v) Subsidiaries/Joint ventures 1,751.05 1,751.05 - 1,751.05 251.05 (vi) Others 1,914.24 967.45 - 967.45 1,467.45 Provision held towards (vii)  (588.90) - - - - depreciation Total 8,818.19 3,037.59 - 3,285.95 2,270.84 (c) Sale & transfers of securities to /from HTM category: During the current FY, the Bank has shifted G-Securities held under AFS category to HTM category as approved by board dated 06/04/2018. The total outstanding of G-Sec portfolio as on date of Shifting was ` 452.83 crore (Face Value). Except for the above, there was no shifting of investments to/from HTM category. 5. Details of Financial Assets purchased/ sold (a) Details of Financial Assets sold to Securitisation / Reconstruction Company for Asset Reconstruction (i) Details of Sales (` crore) Particulars FY 2018-19 FY 2017-18 (i) No. of accounts 1 105 (ii) Aggregate value (net of provisions) of accounts sold to - - SC/RC (iii) Aggregate consideration 15.00 64.07 Additional consideration realized in respect of accounts (iv)  28.05 - transferred in earlier years (v) Aggregate gain / loss over net book value 3.30 9.61 33 Annual Report 2018-19 (ii) Details of Book Value of Investments in Security Receipts (` crore) Particulars Book value of investments in security receipt FY 2018-19 FY 2017-18 (i) Backed by NPAs sold by the AIFI as underlying 0.27 9.76 Backed by NPAs sold by banks/other financial institutions/ (ii)  - - non-banking financial companies as underlying Total 0.27 9.76 (b) Details of Non Performing Financial Assets Purchased / Sold (i) Details of non performing financial assets purchased: Particulars FY 2018-19 FY 2017-18 1. (a) No. of accounts purchased during the year Nil Nil (b) Aggregate outstanding Nil Nil 2. (a) Of these, number of accounts restructured during the year Nil Nil (b) Aggregate outstanding Nil Nil (ii) Details of non performing financial assets sold: (` crore) Particulars FY 2018-19 FY 2017-18 1. No. of accounts sold 1 105 2. Aggregate outstanding 76.44 114.07 3. Aggregate consideration received 15.00 64.07 6. Operating Results Particulars FY 2018-19 FY 2017-18 (i) Interest income as a percentage to average working funds (%) 6.94 6.95 Non-interest income as a percentage to average working funds (%) (ii)  0.32 0.47 Operating profit as a percentage to average working funds (iii)  1.83 2.26 (before provisions) (%) Return on average assets (before provisions for taxation) (%) (iv)  1.83 2.21 (v) Net Profit per employee (` crore) 1.76 1.26 34 Annual Report 2018-19 APPENDIX-I 7. Credit Concentration risk (a) Capital market exposure (` crore) Particulars FY 2018-19 FY 2017-18 (i) direct investment in equity shares, convertible bonds, 488.27 559.66 convertible debentures and units of equity oriented mutual funds the corpus of which is not exclusively invested in corporate debt; (ii) advances against shares / bonds / debentures or other securities - - or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity oriented mutual funds; advances for any other purposes where shares or convertible (iii)  - - bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security; advances for any other purposes to the extent secured by the (iv)  - - collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances; (v) secured and unsecured advances to stockbrokers and - - guarantees issued on behalf of stockbrokers and market makers; loans sanctioned to corporates against the security of shares (vi)  - - / bonds / debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources; bridge loans to companies against expected equity flows / (vii)  - - issues; underwriting commitments taken up by the banks in respect (viii)  - - of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds; financing to stockbrokers for margin trading; (ix)  - - (x) all exposures to Venture Capital Funds 1,596.22 2,792.22 (both registered and unregistered) Total Exposure to Capital Market 2,084.49 3,351.88 (b) Exposure to Country risk The bank had no overseas exposure during the current year and previous year. (c) Prudential Exposure Limits - Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the AIFI (i) The number and amount (not the name of the borrower) of exposures in excess of the prudential exposure limits during the year. Sl. PAN Borrower Industry Industry Sector Amount Amount Exposure No. Number Name Code Name Funded Non-Funded as % to Capital Funds Nil Nil Nil Nil Nil Nil Nil Nil Nil 35 Annual Report 2018-19 (ii) Credit exposure as percentage to capital funds and as percentage to total assets, in respect of: Sr. FY 2018-19 FY 2017-18 No. As % to Total As % to As % to Total As % to Assets Capital funds Assets Capital funds 1. The largest single borrower 9.80 96.89 11.38 88.28 The largest borrower group As large borrowers are Primary lending Institutions, the concept of borrower group is not applicable. 2. The 20 largest single borrowers 71.01 702.36 79.34 615.32 The 20 largest borrower group As large borrowers are Primary lending Institutions, the concept of borrower group is not applicable. (iii) Credit exposure to the five largest industrial sectors as percentage to total loan assets: (` crore) Name of Industry FY 2018-19 FY 2017-18 Credit % to total Credit % to total Exposure loan assets Exposure loan assets TRANSPORT EQUIPMENT 1,492.04 1.09 1,418.29 1.48 AUTO ANCILLARIES 815.70 0.60 1,146.56 1.20 COMMERCIAL VEHICLES 813.53 0.59 315.65 0.33 METAL PRODUCTS N.E.C. 496.71 0.36 413.56 0.43 METAL PRODUCTS PARTS EXCEPT 432.30 0.32 394.68 0.41 MACHINARY Total amount of advances for which intangible securities such as charge over the rights, licenses, authority (iv)  etc. has been taken is Nil as on March 31, 2019 and the estimated value of intangible security as on March 31, 2019 is Nil. (v) The bank had no factoring exposure during the current year and previous year. (vi) The bank had not exceeded the Prudential Exposure Limits during the current year and previous year. (d) Concentration of borrowings /lines of credit, credit exposures and NPAs (i) Concentration of borrowings and lines of credit (` crore) FY 2018-19 FY 2017-18 Total borrowings from twenty largest lenders 96,518.43 57,825.00 Percentage of borrowings from twenty largest lenders to 73.33% 66.48% total borrowings (ii) Concentration of Exposures (` crore) FY 2018-19 FY 2017-18 Total advances to twenty largest borrowers 1,10,147.71 72,346.86 Percentage of advances to twenty largest borrowers to 80.51% 75.41% Total Advances Total Exposure to twenty largest borrowers / customers 1,10,673.09 86,382.24 Percentage of exposures to twenty largest borrowers / 74.82% 70.52% customers to Total Exposure 36 Annual Report 2018-19 APPENDIX-I (iii) Sector-wise concentration of exposures and NPAs (` crore) Sr. Sector FY 2018-19 FY 2017-18 No. Outstanding Gross Percentage of Outstanding Gross Percentage of Total NPAs Gross NPAs to Total NPAs Gross NPAs to Advances Total Advances Advances Total Advances in that sector in that sector I. Industrial sector 1,21,709.27 860.68 0.71% 79,239.93 894.66 1.13% 1. Central Government - - - - - - 2. Central PSUs - - - - - - 3. State Governments - - - - - - 4. State PSUs 295.25 111.05 37.61% 377.74 0.10 0.03% 5. Scheduled 1,11,462.32 - - 68,541.16 - - Commercial Banks 6. Regional Rural Banks - - - - - - 7. Co-operative banks - - - - - - 8. Private sector 9,951.70 749.63 7.53% 10,321.03 894.56 8.67% (excluding banks) II. Micro-finance sector 1,178.73 7.23 0.61% 1,587.16 7.76 0.49% III. Others* 13,917.73 - - 15,115.40 - - Total (I+II+III) 1,36,805.73 867.91 0.63% 95,942.49 902.42 0.94% * includes advances to NBFCs and Small Finance Banks. 8. Derivatives (a) Forward Rate Agreement / Interest Rate Swap ($ USD) Sr. No Particulars FY 2018-19 FY 2017-18 i) The notional principal of swap agreements USD 40,310,000 USD 40,310,000 ii) Losses which would be incurred if counterparties USD 209,019 NIL failed to fulfill their obligations under the agreements iii) Collateral required by the bank upon entering into swaps NIL NIL iv) Concentration of credit risk arising from the swaps USD 6,193 USD 201,550 v) The fair value of the swap book USD (19,056) USD (571,037) (b) Exchange Traded Interest Rate Derivatives Sr. No Particulars FY 2018-19 FY 2017-18 i) Notional principal amount of exchange traded interest NIL NIL rate derivatives undertaken during the year (instrument - wise) ii) Notional principal amount of exchange traded NIL NIL interest rate derivatives outstanding as on March 31 (instrument - wise) iii) Notional principal amount of exchange traded interest NIL NIL rate derivatives outstanding and not "highly effective" (instrument - wise) iv) Mark-to-market value of exchange traded interest NIL NIL rate derivatives outstanding and not "highly effective" (instrument - wise) 37 Annual Report 2018-19 (c) Disclosures on risk exposure in derivatives (i) Qualitative Disclosures (1) The Bank uses Derivatives for hedging of interest rate and exchange risk arising out of mismatch in the assets and liabilities. All derivatives undertaken by Bank are for hedging purposes with underlying as Foreign Currency borrowings, which are not MTM, but only translated. The Bank does not undertake trading in Derivatives. (2) Internal Control guidelines and accounting policies are framed and approved by the Board. The derivative structure is undertaken only after approval of the competent authority. The particulars of derivative details undertaken are also reported to ALCO/Board. (3) The Bank has put systems in place for mitigating the risk arising out of derivative deals. The Bank follows the accrual method for accounting the transactions arising out of derivative deals. (ii) Quantitative Disclosures (` crore) Sr. Particulars FY 2018-19 FY 2017-18 No. Currency Interest rate Currency Interest rate Derivatives Derivatives Derivatives Derivatives 1 Derivatives 7,875.32 8,508.91 (Notional Principal Amount) (i) For hedging 7,875.32 - 8,508.91 - (ii) For trading - - - - 2 Marked to Market Positions [1] 134.09 240.04 (i) Asset (+) 134.09 - 240.04 - (ii) Liability (-) - - - - 3 Credit Exposure [2] 698.06 - 803.78 - 4 Likely impact of one percentage 143.04 167.74 change in interest rate (100*PV01) (i) On hedging derivatives 143.04 - 167.74 - (ii) On trading derivatives - - - - 5 Maximum and Minimum of 100*PV01 observed during the year (i) On hedging 170.56/143.04 - 186.30/167.74 - (ii) On trading - - - - 9. Disclosure of Letters of Comfort (LoCs) issued by AIFIs The particulars of Letters of Comfort (LoCs) issued during the year, assessed financial impact, and assessed cumulative financial obligations under the LoCs issued in the past and outstanding is as under: (` crore) LoCs outstanding as on LoC issued LoCs redeemed LoCs outstanding as on March 31, 2018 during the year during the year March 31, 2019 No of LoC Amount No of LoC Amount No of LoC Amount No of LoC Amount - - 1 0.94 - - 1 0.94 38 Annual Report 2018-19 APPENDIX-I 10. Asset Liability Management (` crore) 1 to 14 15 to 28 29 days Over 3 Over 6 Over 1 Over 3 Over 5 Total days days to 3 months & up month & up year & up years & up years months to 6 months to 1 year to 3 years to 5 years Deposits 296 172 2,635 1,028 5,763 61,149 506 436 71,985 Advances 2,340 7,102 21,952 13,979 15,565 67,183 4,211 552 1,32,884 Investments 6,730 - 1,400 5 434 109 1,114 4,136 13,928 Borrowings 15 620 12,019 8,403 13,237 12,966 1,858 531 49,649 Foreign Currency 174 86 1,556 285 984 3,408 2,218 2,595 11,306 assets Foreign Currency 2 - 1,319 148 544 2,782 2,478 3,983 11,256 liabilities 11. Draw Down from Reserves There is no draw down from Reserves during the current year and previous year. 12. Business Ratios Particulars FY 2018-19 FY 2017-18 Return on average Equity (before provisions for taxation) (%) 16.15 14.05 Return on average assets (before provisions for taxation) (%) 1.83 2.21 Net Profit per employee (` crore) 1.76 1.26 13. Disclosure of Penalties imposed by RBI RBI had not imposed any penalty on the Bank during the current year and previous year. 14. Customer Complaints Particulars FY 2018-19 FY 2017-18 i No. of complaints pending at the beginning of the year 2 2 ii No. of complaints received during the year 183 63 iii No. of complaints redressed during the year 175 63 iv No. of complaints pending at the end of the year 10 2 15. Off-Balance Sheet SPVs Sponsored The Bank had no Off-balance sheet SPVs sponsored during the current year and previous year. 16. Disclosure as per specific accounting standards  ccounting Standard 5 – Net Profit or Loss for the period, prior period items and changes in accounting (a) A policies Income in schedule XIII - ‘other income’ includes Prior Period Income of ` 3,21,69,155 for FY 2018-19 [Previous Year ` 23,48,64,069] and Other expenditure in schedule XIV - ‘Operating Expenses’ for FY 2018-19 includes Prior Period Expenditure of (` 19,33,197) [Previous Year (` 3,68,62,070)]. (b) Accounting Standard 17 – Segment Reporting As required under RBI master directions and Accounting Standard-17 ‘Segment Reporting’ the Bank has disclosed “Business segment” as the Primary Segment. Since the Bank operates in India, there are no reportable geographical segments. Under Business Segment, the Bank has identified Whole Sale Operations (Direct Lending), Whole Sale Operations (Refinance) and Treasury as its three reporting segments. These segments have been identified after considering the nature and risk profile of the products and services, the organization structure and the internal reporting system of the Bank. Previous year’s figures have been regrouped and reclassified to conform to the current year’s methodology. 39 Annual Report 2018-19 Part A: BUSINESS SEGMENTS (` crore) Business Segments Wholesale Wholesale Treasury Total Operations Operations (Direct Lending) (Refinance) Particulars FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 1 Segment Revenue 1,007 1,212 8,261 4,897 649 491 9,917 6,600 Exceptional Items - - Total 9,917 6,600 2 Segment Results 191 200 2,101 1,759 359 142 2,651 2,101 Exceptional Items - - Total 2,651 2,101 Unallocable Expenses 148 139 Operating profit 2,503 1,962 Income Tax 551 533 (Net of write back) Net profit 1,952 1,429 3 Other information Segment Assets 9,526 9,744 1,29,971 87,021 14,236 10,405 1,53,733 1,07,170 Unallocated Assets 2,128 1,699 Total Assets 1,55,861 1,08,869 Segment Liabilities 6,726 6,969 1,18,901 78,207 12,016 7,422 1,37,643 92,598 Unallocated Liabilities 1,655 1,661 Total 1,39,298 94,259 Capital / Reserves 2,812 2,793 10,960 8,448 2,791 3,369 16,563 14,610 Total 16,563 14,610 Total Liabilities 1,55,861 1,08,869 Part B: GEOGRAPHIC SEGMENTS - Nil 40 Annual Report 2018-19 APPENDIX-I (c) Accounting Standard 18 – Related Party Disclosures (` crore) Items / Related Party Parent Sub-sidiaries Associates/ Key Relatives Total (as per Joint Management of Key ownership or ventures Personnel @ Management control) Personnel Borrowings# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Deposit# Outstanding at the year end - - 0.50 0.81 - 1.31 Maximum during the year - 121.89 0.50 0.81 - 123.21 Placement of deposits# - - - - - - Outstanding at the year end - - - - - - Maximum during the year - - - - - - Advances# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Investments# Outstanding at the year end - 1,751.05 28.60 - - 1,779.65 Maximum during the year - 1,751.05 28.60 - - 1,779.65 Non funded commitments# - - - - - - Outstanding at the year end - - - - - - Maximum during the year - - - - - - Leasing arrangements availed# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Leasing arrangements provided# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Purchase of fixed assets - - - - - - Sale of fixed assets - - - - - - Interest paid - 1.79 0.03 0.02 - 1.84 Interest received Rendering of services* - 36.57 3.31 - - 39.89 Receiving of services* - - - - - - Management contracts* - - - 0.93** - 0.93** @ Whole time directors of the Board # The outstanding at the year end and the maximum during the year are to be disclosed * Contract services etc. and not services like remittance facilities, locker facilities etc. ** Remuneration to Key Management Personnel. 41 Annual Report 2018-19 17. Unamortised Pension and Gratuity Liabilities The pension and gratuity liability are provided for on the basis of an actuarial valuation made at the end of each financial year based on the projected unit credit method. The acturial gains/ losses are taken to the profit & loss account and are not amortized. As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 42 Annual Report 2018-19 APPENDIX-I Cash Flow Statement for the year ended March 31, 2019 (Amount in `) March 31, 2018 Particulars March 31, 2019 March 31, 2019 1. Cash Flow from Operating Activities 19,62,44,74,792 Net Profit before tax as per P & L Account 25,03,48,13,341 Adjustments for: 11,33,97,507 Depreciation 18,26,95,963 (19,31,47,663) Provision for net depreciation in investments (2,67,88,91,954) 1,37,18,92,139 Provisions made (net of write back) 3,02,04,37,038 (1,16,51,82,129) Profit on sale of investments (net) (2,50,74,34,846) (22,69,860) Profit on sale of fixed assets (1,58,59,255) (24,50,87,253) Dividend Received on Investments (39,74,12,153) (2,39,64,65,207) 19,50,40,77,533 Cash generated from operations 22,63,83,48,134 (Prior to changes in operating Assets and Liabilities) Adjustments for net changes in: (6,46,88,49,539) Current assets (19,82,00,32,174) 1,37,73,08,438 Current liabilities 6,03,25,70,598 1,81,37,84,030 Bills of Exchange 3,92,85,72,063 (2,73,12,53,68,132) Loans & Advances (4,12,47,82,85,157) 31,66,20,54,018 Net Proceeds of Bonds and Debentures & other 1,30,90,67,95,800 borrowings 2,45,12,68,96,577 Deposits received 3,15,47,86,35,474 38,58,25,392 24,04,82,56,604 19,88,99,02,925 46,68,66,04,738 (4,89,37,07,102) Payment of Tax (6,45,75,03,905) (6,45,75,03,905) 14,99,61,95,823 Net Cash flow from operating Activities 40,22,91,00,833 2. Cash Flow from Investing Activities (46,27,13,666) Net (Purchase)/Sale of fixed assets (61,25,56,356) (17,21,88,77,127) Net (Purchase)/sale/redemption of Investments (4,44,81,08,213) 24,50,87,253 Dividend Received on Investments 39,74,12,153 (17,43,65,03,540) Net cash used in Investing Activities (4,66,32,52,416) 3. Cash flow from Financing Activities - Proceeds from issuance of share capital & share - premium (1,09,55,95,401) Dividend on Equity Shares & tax on Dividend (1,32,79,39,690) (1,09,55,95,401) Net cash used in Financing Activities (1,32,79,39,690) (3,53,59,03,118) 4. Net increase/(decrease) in cash and cash 34,23,79,08,727 equivalents 28,35,05,06,570 5. Cash and Cash Equivalents at the beginning of the 24,81,46,03,452 period 24,81,46,03,452 6. Cash and Cash Equivalents at the end of the period 59,05,25,12,179 43 Annual Report 2018-19 (Amount in `) March 31, 2018 Particulars March 31, 2019 March 31, 2019 7 Cash and cash equivalents at the end of the period includes 6,13,630 Cash in Hand 6,09,656 20,75,79,026 Current account balance with Bank 63,37,40,702 14,50,00,00,018 Mutual Funds 5,00,00,00,000 10,10,64,10,778 Deposits 53,41,81,61,821 Note: Cash Flow statement has been prepared as per the Indirect Method prescribed in AS-3 (Revised) ‘Cash Flow Statement’ issued by the Institute of Chartered Accountants of India (ICAI) Significant Accounting Policies XV Notes to Accounts XVI As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 44 Annual Report 2018-19 Appendix II Consolidated Balance Sheet along with Profit and Loss Account and Cash Flow Statement of SIDBI Independent Auditor’s Report The Shareholders 3. Emphasis of Matter Small Industries Development Bank of India i. Refer Note No. 1 of Standalone Financial Statement of the Bank -As per RBI circular dated Report on Consolidated Financial Statements August 4, 2016, financial statements of the bank 1. Opinion are required to be presented in accordance with the IND AS for accounting periods beginning We have audited the accompanying Consolidated from April 1, 2018. However, as per the bank, Financial Statements of “Small Industries pending modification in SIDBI Regulations, Development Bank of India” (“the Bank”), its 2000 regarding the IND- AS Formats and subsidiaries and associates (the Bank, its subsidiaries guidance from RBI, the financials for the year and associates constitute “the Group”) as at March ended are continued to be presented as per 31, 2019 which comprises the consolidated Balance Indian GAAP. Sheet as at March 31, 2019, and the consolidated Profit and Loss account and consolidated Cash ii. We draw attention to: Flow Statement for the year then ended, notes to the consolidated financial statements and a summary a) Note No. 4B of Annexure I to Consolidated of significant accounting policies (“the consolidated Financial Statements with regard to financial statements”). non-consolidation of 6 (six) associates, wherein as per the management the In our opinion and to the best of our information carrying amount of the investments are and according to the explanations given to us, the not realisable and are fully provided for. aforesaid consolidated financial statement give a b) Note No. 4C of Annexure I to Consolidated true and fair view in conformity with the accounting Financial Statements with regard to non- principles generally accepted in India, of their consolidation of 4 (four) associates, as consolidated state of affairs of the group as at 31st in view of the management these are not March 2019, of the consolidated Profits and its significant components and hence not consolidated cash flows for the year then ended. considered for consolidation. 2. Basis for Opinion Our opinion is not modified in respect of these We conducted our audit in accordance with the matters. Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Our 4. Key Audit Matters responsibilities under those standards are further Key audit matters are those matters that, in our described in the Auditor’s Responsibilities for the professional judgment, were of most significance in Audit of the Consolidated Financial Statements our audit of the consolidated financial statements of section of our report. We are independent of the the current period. These matters were addressed in Group in accordance with the Code of Ethics issued the context of our audit of the consolidated financial by ICAI. We believe that the audit evidence we have statements as a whole, and in forming our opinion obtained is sufficient and appropriate to provide a thereon, and we do not provide a separate opinion on basis for our opinion. these matters. Key audit matters applicable only to the Bank are as under: Sr. No. Key Audit Matter Response to Key Audit Matter 1. Contingent Liability and Provision for Income Tax: In the recognition and measurement of In respect of bad debts written off and claimed under provisions, there is uncertainty about the section 36 (1) (viia) (c) of the Income Tax 1961, the timing or amount of the future expenditure Income Tax Department has disallowed the claim required to settle the liability. citing that the Bank has claimed double tax benefit as the Bank has already been allowed benefit at the time In respect of contingent liabilities, there of making provision for doubtful debts. are estimates and assumptions made to determine the amount to be disclosed. 46 Annual Report 2018-19 APPENDIX-II Sr. No. Key Audit Matter Response to Key Audit Matter As a result, there is a high degree of judgment We have verified the previous pending litigation orders. required for the recognition and measurement In certain years, the Income Tax Appellate Tribunal has of provisions and disclosure of contingent already allowed the Bank’s claim, which is challenged liabilities. by the Department before higher authorities. Further, the Bank has obtained views of external tax expert to The Bank has reported contingent ascertain the chances of sustainability of Bank’s claim liabilities of Income Tax amounting to and based on their views, no provision for tax is made ` 6,98,13,20,359/- towards claims against considering the same to be allowable. the Bank not acknowledged as debts in the financial statements Thus, in respect to demands outstanding with regard to section 36 (1) (viia) (c) and other disallowances / matters, where the assessment has been made against the Bank and appeals are pending, the same are included in contingent liability and hence no provision is considered necessary. 2. Information Technology general Controls: A significant part of the Bank’s financial We focused our audit on IT systems and controls that reporting process is heavily reliant on IT are significant to the Bank’s financial reporting process. systems with automated processes and The Bank has a system in place for getting application controls over the capture, storage and software audits for identified Application Systems at extraction of information. reasonable intervals. Information Systems (IS) Audit is A fundamental component of these processes done at branches by officers of the Bank at reasonable and controls is ensuring appropriate user intervals. access and change management protocols We have relied on the Application Systems Audits exist and being adhered to. These protocols carried by external consultants and IS audits done at are important because they ensure that access the branches. and changes to IT systems and related data are made and authorised in an appropriate We have reviewed reports of external consultants and manner. IS audits done at the branches on sample basis and the same were found to be in order. Where required, we performed a greater level of testing to validate the integrity and reliability of data and reporting thereof. 5. Other Information As on date, the CMD’s Statement, Directors’ Report, The Bank’s Board of Directors is responsible for the Overall Business Operations, Management and Corporate Governance of the bank are under Other Information. The Other Information comprises preparation. When we read the same and if we the information included in the CMD’s Statement, conclude that there is any material misstatement Directors’ Report, Overall Business Operations, therein, then we will communicate the matter to Management and Corporate Governance but does those charged with governance. not include the consolidated financial statements and our auditor’s report thereon. 6. Other Matters Our opinion on the consolidated financial statements We did not audit the financial statements of the does not cover the Other Information and we do 2 (Two) subsidiaries, whose financial statements not express any form of assurance / conclusion reflect total assets of ` 47,87,01,427 as at March thereon. In connection with our audit of the financial 31, 2019, total revenue of ` 14,53,52,847 and net statements, our responsibility is to read the Other cash flows amounting to ` (1,44,77,419) for the Information and, in doing so, consider whether the year then ended, as considered in the consolidated Other Information is materially inconsistent with the financial statements. The consolidated financial consolidated financial statements or our knowledge statements also include Group’s share of net profit of obtained in the audit or otherwise appears to be ` 19,39,45,043 for the year ended March 31, 2019 as materially misstated. considered in the consolidated financial statements, 47 Annual Report 2018-19 in respect of 6 (Six) associates whose financial are responsible for maintenance of adequate statements have not been audited by us. These accounting records, for safeguarding of the assets financial statements / financial information have been of the Group and for preventing and detecting frauds audited by other auditors whose reports have been and other irregularities; selection and application of furnished to us by the Management, and our opinion appropriate accounting policies, making judgments on the consolidated financial statement, in so far as and estimates that are reasonable and prudent; and it relates to the amounts and disclosures included design, implementation and maintenance of internal in respect of these subsidiaries and associates, and controls, that were operating effectively for ensuring our report is based solely on the report of the other the accuracy and completeness of the accounting auditors. records, relevant to the preparation and presentation of the financial statements that give a true and fair We did not audit the financial statements of the view and are free from material misstatement, 1 (One) subsidiary, whose financial statements whether due to fraud or error, which have been used reflect total assets of ` 1,72,51,03,67,166 as at March for the purpose of preparation of the consolidated 31, 2019, Total revenue of ` 8,61,46,36,871 and net financial statements by the Bank’s management, as cash flows amounting to ` (23,64,35,51,458) for the aforesaid. year then ended, as considered in the consolidated financial statements. The consolidated financial In preparing the consolidated financial statements, statements also include Group’s share of Net loss of the respective Board of directors of the bank ` 1,17,68,479 for the year ended March 31, 2019 as and companies included in the Group and of its considered in the consolidated financial statements, associates are responsible for assessing the ability of in respect of 1 (One) Associate whose financial the group to continue as a going concern, disclosing, statements have not been audited by us. as applicable, matters related to going concern and using the going concern basis of accounting unless These financial statements are unaudited and have management either intends to liquidate the group or been furnished to us by the Management and our to cease operations, or has no realistic alternative but opinion on the consolidated financial statement, in to do so. so far as it relates to the amounts and disclosures included in respect of these subsidiaries and The respective Board of directors of the bank and associates, is based solely on such unaudited companies included in the Group and of its associates financial statements. are responsible for overseeing the financial reporting process of the group. We are unable to comment upon resultant impact, if any, on the Group’s share of profit for the year ended 8. Auditor’s Responsibilities for the Audit of March 31, 2019, had the aforesaid associates been the Financial Statements audited. Our objectives are to obtain reasonable assurance Our opinion on the consolidated financial statements about whether the consolidated financial statements is not modified in respect of these matters with as a whole are free from material misstatement, respect to our reliance on the work done and the whether due to fraud or error, and to issue an reports of the other auditors and the financial auditor’s report that includes our opinion. Reasonable statements / financial information certified by the assurance is a high level of assurance, but is not a Management. guarantee that an audit conducted in accordance with SAs will always detect a material misstatement Responsibilities of Management and 7.  when it exists. Misstatements can arise from fraud or those charged with Governance for the error and are considered material if, individually or in Consolidated Financial Statements the aggregate, they could reasonably be expected to influence the economic decisions of users taken on The Bank’s Management is responsible for the the basis of these consolidated financial statements. preparation and presentation of these consolidated financial statements on the basis of separate As part of an audit in accordance with SAs, we financial statements and other financial information exercise professional judgment and maintain regarding components that give a true and fair view professional skepticism throughout the audit. We of the consolidated financial position, consolidated also: financial performance and consolidated cash flows of the Group in accordance with the accounting Identify and assess the risks of material principles generally accepted in India, including misstatement of the financial statements, the applicable Accounting Standards issued by whether due to fraud or error, design and the Institute of Chartered Accountants of India. perform audit procedures responsive to those The respective Board of directors of companies risks, and obtain audit evidence that is sufficient 48 Annual Report 2018-19 APPENDIX-II and appropriate to provide a basis for our our independence, and where applicable, related opinion. The risk of not detecting a material safeguards. misstatement resulting from fraud is higher than for one resulting from error, as fraud may Report on Other Legal and Regulatory 9.  involve collusion, forgery, intentional omissions, Requirements misrepresentations, or the override of internal We report that: control. i. The consolidated financial statements have Obtain an understanding of internal control been prepared by the Bank’s Management in relevant to the audit in order to design accordance with the requirements of Accounting audit procedures that are appropriate in the Standard (AS) 21, “Consolidated Financial circumstances. Statements”, Accounting Standard (AS) 23, “Accounting for Investments in Associates in Evaluate the appropriateness of accounting Consolidated Financial Statements” issued policies used and the reasonableness of by the Institute of Chartered Accountants of accounting estimates and related disclosures India and on the basis of the separate financial made by management. statements of the Bank, its subsidiaries and Conclude on the appropriateness of associates. management’s use of the going concern basis ii. We have sought and obtained all the of accounting and, based on the audit evidence information and explanations, which to the best obtained, whether a material uncertainty of our knowledge and belief were necessary exists related to events or conditions that may for the purpose of our audit of the aforesaid cast significant doubt on the Group’s ability to consolidated financial statements and have continue as a going concern. If we conclude that found them to be satisfactory. a material uncertainty exists, we are required to draw attention in our auditor’s report to the iii. In our opinion, proper books of account as related disclosures in the financial statements required by law relating to preparation of the or, if such disclosures are inadequate, to modify aforesaid consolidated financial statements our opinion. Our conclusions are based on have been kept so far as it appears from our the audit evidence obtained up to the date of examination of those books and the reports of our auditor’s report. However, future events or the other auditors conditions may cause the Group’s to cease to continue as a going concern. iv. The Consolidated Balance Sheet, the Consolidated Profit and Loss Account and Evaluate the overall presentation, structure the Consolidated Cash Flow Statement dealt and content of the financial statements, with by this Report are in agreement with including the disclosures, and whether the Books of Account maintained for the purpose financial statements represent the underlying of preparation of the consolidated financial transactions and events in a manner that statements. achieves fair presentation. v. In our opinion, the aforesaid consolidated We communicate with those charged with financial statements comply with the applicable governance regarding, among other matters, the Accounting Standards. planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. For CHHAJED & DOSHI Chartered Accountants We also provide those charged with governance with [Firm’s Reg. No. 101794W] a statement that we have complied with relevant ethical requirements regarding independence, and to CA Kiran K. Daftary communicate with them all relationships and other Camp: Lucknow Partner matters that may reasonably be thought to bear on Date: 10th May 2019 Membership No. 010279 49 Annual Report 2018-19 Consolidated Balance Sheet as at March 31, 2019 (Amount in `) SCHEDULES March 31, 2019 March 31, 2018 CAPITAL AND LIABILITIES Capital I 5,31,92,20,309 5,31,92,20,309 Reserves, Surplus and Funds II 1,65,57,54,95,458 1,47,35,01,02,299 Deposits III 8,69,22,47,49,673 5,53,74,61,14,199 Borrowings IV 5,96,99,79,07,872 4,64,87,21,70,971 Other Liabilities and Provisions V 77,16,91,50,528 71,22,71,37,897 Deferred Tax Liability 25,71,28,714 79,62,76,937 Total 17,14,54,36,52,554 12,43,31,10,22,612 ASSETS Cash and Bank Balances VI 1,02,21,13,95,206 67,39,00,91,227 Investments VII 76,35,87,98,386 87,40,36,31,601 Loans & Advances VIII 14,80,77,29,95,380 10,53,46,75,11,351 Fixed Assets IX 2,86,08,41,637 2,41,09,52,297 Other Assets X 52,33,96,21,945 32,63,88,36,136 Total 17,14,54,36,52,554 12,43,31,10,22,612 Contingent Liabilities XI 93,65,32,75,072 89,79,97,51,555 Consolidated Significant Accounting Policies (Schedule XV) and Notes to Accounts (Annexure I) The Schedules referred to above form an integral part of the Balance Sheet. As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 50 Annual Report 2018-19 APPENDIX-II Consolidated Profit & Loss Account for the year ended March 31, 2019 (Amount in `) SCHEDULES March 31, 2019 March 31, 2018 INCOME Interest and Discount XII 1,02,65,97,31,674 68,41,85,19,311 Other Income XIII 4,88,04,64,863 5,43,93,33,090 Total 1,07,54,01,96,537 73,85,78,52,401 EXPENDITURE Interest & Financial charges 74,16,16,92,565 45,91,11,15,653 Operating Expenses XIV 5,22,29,08,970 5,21,72,11,197 Provisions & Contingencies 2,88,16,40,963 65,65,91,422 Total 82,26,62,42,498 51,78,49,18,272 Profit before Tax 25,27,39,54,039 22,07,29,34,129 Provision for Income Tax 7,23,63,53,979 5,72,72,84,096 Deferred Tax Adjustment [(Asset) / Liability] (1,55,60,01,189) 58,02,30,296 Share of earning/(loss) in associates (7,52,668) 47,07,833 Profit after Tax 19,59,28,48,581 15,77,01,27,570 Profit brought forward 1,01,96,45,697 92,33,44,965 Total Profit / (Loss) 20,61,24,94,278 16,69,34,72,535 Appropriations Transfer to General Reserve 16,64,35,00,000 13,25,60,00,000 Transfer to Special reserve u/s 36(1)(viii) of The Income 70,00,00,000 70,00,00,000 Tax Act, 1961 Transfer to Statutory Reserve u/s 45-IC of RBI Act, 1934 5,64,46,957 31,64,38,121 Others a) Transfer to Investment Fluctuation Reserve 44,22,00,000 - Transfer to Staff Welfare Fund 2,00,00,000 2,00,00,000 Development Fund - 2,00,00,000 Dividend on Shares 1,36,96,99,230 1,14,36,32,367 Tax on Dividend 33,23,22,555 26,77,56,350 Surplus in Profit & Loss account carried forward 1,04,83,25,536 96,96,45,697 Total 20,61,24,94,278 16,69,34,72,535 Basic/Diluted Earning Per Share 36.83 29.65 Consolidated Significant Accounting Policies (Schedule XV) and Notes to Accounts (Annexure I) The Schedules referred to above form an integral part of the Profit & Loss Account. As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 51 Annual Report 2018-19 Schedules to Consolidated Balance Sheet (Amount in `) CAPITAL AND LIABILITIES March 31, 2019 March 31, 2018 Schedule I: Capital (a) Authorized Capital - Equity Share Capital (75,00,00,000 Equity 7,50,00,00,000 7,50,00,00,000 Shares of ` 10/- each) -  Preference Share Capital (25,00,00,000 2,50,00,00,000 2,50,00,00,000 Redeemable Preference Shares of ` 10/- each) (b) Issued, Subscribed and Paid-up Capital: 5,31,92,20,310 5,31,92,20,310 - Equity Share Capital (53,19,22,031 Equity 5,31,92,20,309 5,31,92,20,309 Shares of ` 10/- each) -  Preference Share Capital - - Total 5,31,92,20,309 5,31,92,20,309 Schedule II: Reserves, Surplus and Funds A) Reserves i) General Reserve - Opening Balance 1,10,47,31,22,302 97,26,61,41,469 - Additions during the year 16,91,70,33,089 13,25,69,80,834 - Utilisations during the year - - - Closing Balance 1,27,39,01,55,391 1,10,52,31,22,303 ii) Share Premium - Opening Balance 16,68,07,79,690 16,68,07,79,690 - Additions during the year - - - Utilisations during the year - - - Closing Balance 16,68,07,79,690 16,68,07,79,690 iii) Specific Reserves a) Investment Reserve - Opening Balance - - - Additions during the year - - - Utilisations during the year - - - Closing Balance - - Special Reserve created and maintained u/s b)  36 (1) (viii) of The Income Tax Act, 1961 - Opening Balance 14,97,00,00,000 14,27,00,00,000 - Additions during the year 70,00,00,000 70,00,00,000 - Utilisations during the year - - - Closing Balance 15,67,00,00,000 14,97,00,00,000 Statutory Reserve created u/s 45-IC of c)  Reserve Bank of India Act. - Opening Balance 66,39,81,380 34,75,43,259 - Additions during the year 5,64,46,957 31,64,38,121 - Utilisations during the year - Closing Balance 72,04,28,337 66,39,81,380 52 Annual Report 2018-19 APPENDIX-II Schedules to Consolidated Balance Sheet (Amount in `) CAPITAL AND LIABILITIES March 31, 2019 March 31, 2018 d) Other Reserves i) Investment Fluctuation Reserve - Opening Balance 70,37,86,025 70,37,86,025 - Additions during the year 44,22,00,000 - - Utilisations during the year - - Closing Balance 1,14,59,86,025 70,37,86,025 B) Surplus in Profit and Loss account 1,04,83,25,536 96,96,45,697 C) Funds a) National Equity Fund - Opening Balance 2,56,95,54,646 2,56,29,86,071 - Additions / Write back during the year 8,28,35,216 65,68,575 - Utilisations during the year - - - Closing Balance 2,65,23,89,862 2,56,95,54,646 b) Staff Welfare Fund - Opening Balance 24,92,32,557 24,68,86,023 - Additions during the year 2,00,00,000 2,00,00,000 - Utilisations during the year 2,18,01,940 1,76,53,465 - Closing Balance 24,74,30,617 24,92,32,558 c) Others 2,00,00,000 2,00,00,000 Total 1,65,57,54,95,458 1,47,35,01,02,299 Schedule III Deposits A) Fixed Deposits 64,86,00,49,673 53,74,61,14,199 B) From Banks a) Under MSME Refinance Fund 5,80,00,00,00,000 2,80,00,00,00,000 b) Under MSME Risk Capital Fund 15,00,00,00,000 15,00,00,00,000 c) Others -From Foreign & Private Sector Banks - - d) Under MSME India Aspiration Fund 9,36,47,00,000 5,00,00,00,000 Under Fund for Venture Capital in MSME sector e)  50,00,00,00,000 50,00,00,00,000 2014-15 f) Under Priority Sector Shortfall 1,50,00,00,00,000 1,50,00,00,00,000 Subtotal (B) 8,04,36,47,00,000 5,00,00,00,00,000 Total 8,69,22,47,49,673 5,53,74,61,14,199 53 Annual Report 2018-19 Schedules to Consolidated Balance Sheet (Amount in `) CAPITAL AND LIABILITIES March 31, 2019 March 31, 2018 Schedule IV Borrowings I) Borrowings in India 1. From Reserve Bank of India - - 2. From Government of India 21,46,93,19,323 22,16,75,23,471 (including Bonds subscribed by GOI) 3. Bonds & Debentures 1,44,95,50,00,000 1,65,49,00,00,000 4. From Other Sources - Commercial Paper 47,50,00,00,000 57,00,00,00,000 - Certificate of Deposits 1,51,55,00,00,000 1,00,81,10,58,900 - Term Loans from Banks 1,24,46,56,06,275 5,14,97,50,157 - Term Money Borrowings - - - Others 14,99,20,398 2,99,81,04,466 Subtotal (I) 4,90,08,98,45,996 3,53,61,64,36,994 II) Borrowings outside India (a) KFW, Germany 14,44,29,19,606 15,46,66,00,852 (b) Japan International Cooperation Agency (JICA) 36,80,54,19,487 41,56,06,40,163 (c) IFAD, Rome 1,12,48,25,395 1,16,52,80,010 (d) World Bank 51,47,72,81,791 49,29,67,67,641 (e) Others 3,05,76,15,597 3,76,64,45,311 Subtotal (II) 1,06,90,80,61,876 1,11,25,57,33,977 Total (I & II) 5,96,99,79,07,872 4,64,87,21,70,971 Schedule V Other Liabilities and Provisions: Interest Accrued 29,73,55,86,890 22,37,10,53,077 Provision for SIDBI Employees' Provident Fund 2,80,17,62,288 2,17,11,80,143 Provision for SIDBI Pension Fund 45,55,68,252 45,98,78,213 Provision for Sick Leave Fund 11,18,93,681 21,12,89,197 Provision for Medical Assistance Scheme Fund 18,00,58,808 19,30,76,860 Provision for Employees Benefit 1,09,09,74,143 2,72,65,14,780 Others (including provisions) 33,62,50,53,519 35,92,99,17,876 Provisions for Exchange Rate Fluctuation 1,53,73,62,766 1,53,73,62,766 Contingent provisions against standard assets 5,97,96,45,246 4,25,04,15,977 Proposed Dividend (including tax on dividend) 1,65,12,44,935 1,37,64,49,008 Total 77,16,91,50,528 71,22,71,37,897 54 Annual Report 2018-19 APPENDIX-II Schedules to Consolidated Balance Sheet (Amount in `) ASSETS March 31, 2019 March 31, 2018 Schedule VI Cash & Bank Balances 1. Cash in Hand & Balances with Reserve Bank of India 6,14,123 6,24,411 2. Balances with other Banks (a) In India i) in current accounts 68,23,37,125 20,97,24,902 ii) in other deposit accounts 95,33,85,30,715 59,57,25,45,478 (b) Outside India i) in current accounts 16,18,137 6,58,942 ii) in other deposit accounts 6,18,82,95,106 7,60,65,37,494 Total 1,02,21,13,95,206 67,39,00,91,227 Schedule VII Investments [Net of Provisions] A) Treasury operations 1. Securities of Central and State Governments 4,46,80,73,744 4,55,71,12,568 2. Shares of Banks & Financial Institutions - 23,95,12,137 Bonds & Debentures of Banks & Financial 3.  6,40,56,57,540 12,66,68,18,755 Institutions Stocks, Shares, Bonds & Debentures of 4.  1,99,92,72,771 2,48,80,48,275 Industrial Concerns 5. Short Term Bills Rediscounting Scheme - - 6. Others 44,60,07,32,633 42,66,30,80,482 Subtotal (A) 57,47,37,36,688 62,61,45,72,217 B) Business Operations 1. Shares of Banks & Financial Institutions 1,78,47,71,142 1,75,12,24,775 Bonds & Debentures of Banks & Financial 2.  5,65,33,000 5,65,33,000 Institutions Stocks, Shares, bonds & Debentures of 3.  4,85,32,42,053 3,82,54,41,280 Industrial Concerns 4. Investment in Subsidiaries - - 5. Others 12,19,05,15,503 19,15,58,60,329 Subtotal (B) 18,88,50,61,698 24,78,90,59,384 Total (A+B) 76,35,87,98,386 87,40,36,31,601 Schedule VIII Loans & Advances [Net of Provisions] A) Refinance to - Banks and Financial Institutions 12,56,89,55,95,686 8,07,41,45,29,762 - Micro Finance Institutions 16,50,04,35,388 21,69,19,52,501 - NBFC 1,12,34,37,42,688 1,27,59,37,93,703 - Bills Rediscounted - - - Others (Resource Support) 92,00,29,123 - Subtotal (A) 13,86,65,98,02,885 9,56,70,02,75,966 55 Annual Report 2018-19 Schedules to Consolidated Balance Sheet (Amount in `) ASSETS March 31, 2019 March 31, 2018 B) Direct Loans - Loans and Advances 88,96,65,09,187 87,74,77,86,153 - Receivable Finance Scheme 5,14,66,83,308 9,01,94,49,232 - Bills Discounted - Subtotal (B) 94,11,31,92,495 96,76,72,35,385 Total (A+B) 14,80,77,29,95,380 10,53,46,75,11,351 Schedule IX Fixed Assets [Net of Depreciation] 1. Premises 2,83,23,37,105 2,38,98,20,372 2. Others 2,85,04,532 2,11,31,925 Total 2,86,08,41,637 2,41,09,52,297 Schedule X Other Assets: Accrued Interest 33,80,66,88,189 17,83,55,60,886 Advance Tax (Net of provision) 3,79,52,73,496 3,41,21,79,862 Others 7,27,41,57,841 5,81,89,52,288 Expenditure to the extent not written off 7,46,35,02,419 5,57,21,43,100 Total 52,33,96,21,945 32,63,88,36,136 Schedule XI CONTINGENT LIABILITIES i) Claims against the Bank not acknowledged as debts 6,98,13,20,359 3,53,80,94,592 ii) On account of Guarantees / Letters of Credit 54,95,08,487 59,49,90,462 iii) On account of Forward Contracts 1,03,14,60,100 57,76,04,313 iv) On account of Underwriting Commitments - - v) On account of uncalled monies on partly paid 6,33,78,34,494 - shares, debentures Other items for which the Bank is contingently vi)  78,75,31,51,632 85,08,90,62,188 liable (derivative contracts etc.) Total 93,65,32,75,072 89,79,97,51,555 56 Annual Report 2018-19 APPENDIX-II Schedules to Consolidated Profit & Loss Account (Amount in `) March 31, 2019 March 31, 2018 Schedule XII Interest and Discount 1. Interest and Discount on Loans, Advances and Bills 96,67,92,56,917 62,84,01,08,672 2. Income on Investments / Bank balances 5,98,04,74,757 5,57,84,10,639 Total 1,02,65,97,31,674 68,41,85,19,311 Schedule XIII Other Income: 1. Upfront and Processing Fees 35,06,51,911 23,34,06,263 2. Commission and Brokerage 1,49,28,003 1,83,08,305 3. Profit on sale of Investments 3,24,91,18,727 2,51,13,83,994 Income earned by way of dividends etc. from 4.  92,75,000 90,20,000 Subsidiaries / Associates 5. Provision of Earlier Years written Back - - 6. Others 1,25,64,91,222 2,66,72,14,528 Total 4,88,04,64,863 5,43,93,33,090 Schedule XIV Operating Expenses: Payments to and provisions for employees 3,68,87,39,790 3,80,13,70,805 Rent, Taxes and Lighting 19,69,05,286 21,23,12,511 Printing & Stationery 1,03,02,916 1,15,32,954 Advertisement and Publicity 5,63,94,542 3,48,51,209 Depreciation / Amortisation on Bank's Property 18,43,71,236 11,44,13,211 Directors’ fees, allowances and expenses 42,61,620 60,71,999 Auditor’s Fees 35,07,480 43,68,052 Law Charges 2,69,58,423 1,94,38,172 Postage, Courier, Telephones etc. 24,78,076 29,57,364 Repairs and maintenance 12,35,98,554 9,48,00,843 Insurance 49,18,746 52,33,581 Contribution to CGTMSE - - Other Expenditure 92,04,72,301 90,98,60,496 Total 5,22,29,08,970 5,21,72,11,197 57 Annual Report 2018-19 Schedules to Consolidated Balance Sheet SCHEDULE XV – CONSOLIDATED 6) Kitco Limited SIGNIFICANT ACCOUNTING POLICIES 7) Apitco Limited 1. BASIS OF PREPARATION Consolidated financial statements of the Group The consolidated financial statements (CFS) have (comprising of 3 subsidiaries, 7 associates as per been prepared to comply in all material respects details given above) have been prepared on the with the Small Industries Development Bank of India basis of: Act, 1989 (Parent), its subsidiaries and associates a. Audited accounts of SIDBI (Parent) & 3 and regulations thereof, prudential norms prescribed subsidiaries companies. by Reserve Bank of India, applicable Accounting Standards issued by the Institute of Chartered b. Line by line aggregation of each item of asset/ Accountants of India, practices prevailing in the liability/income/expense of the subsidiaries Banking Industry. The consolidated financial with the respective item of the Parent, and after statements have been prepared under the historical eliminating all material intra-group balances / cost convention on an accrual basis, unless transactions, unrealised profit/loss as per AS otherwise stated. Except otherwise mentioned, the 21 (Consolidated Financial Statements) issued accounting policies that are applied by the Bank, are by the Institute of Chartered Accountants of consistent with those used in the previous year. India (ICAI) Use of Estimates: c. Investments in Associates are accounted The preparation of consolidated financial statements for under the Equity Method as per AS 23 in conformity with Generally Accepted Accounting (Accounting for Investments in Associates in Principles (GAAP) requires the management to Consolidated Financial Statements) issued by make estimates and assumptions that affect the ICAI based on the audited Financial Statements reported amounts of assets and liabilities and the of the associates. disclosure of contingent liabilities as of the date of the consolidated financial statements and the d. In case of difference in Accounting Policies, reported income and expenses for the reporting the Financial Statements of Subsidiaries and period. Management believes that these estimates Associates are adjusted, wherever necessary and assumptions are reasonable and prudent. and practicable, to conform to the Accounting However, actual results could differ from these Policies of the Parent. estimates. Any revision to accounting estimates is recognized prospectively in current and future 2. REVENUE RECOGNITION periods in accordance with the requirements of the Revenue is recognized to the extent it is probable respective accounting standard. that the economic benefits will flow to the Bank and the revenue can be reliably measured. Consolidation Procedures: Subsidiaries included in consolidated financial A) INCOME: statements are: i. Interest income including penal interest is 1)  Micro Units Development & Refinance Agency accounted for on accrual basis, except in the (Mudra) case of non-performing assets where it is 2) SIDBI Venture Capital Limited (SVCL). recognized upon realization. 3) SIDBI Trustee Company Limited (STCL). ii. Income in the Profit & Loss Account is shown gross i.e. before provisions as per RBI Associates included in consolidated financial guidelines and other provisions as per Bank’s statements are: internal policy. 1)  Acuitě Ratings & Research Limited [Erstwhile SMERA Ratings Limited (SMERA)] iii. Discount received in respect of bills discounted 2) India SME Asset Reconstruction Company / rediscounted and on discounted instruments Limited (ISARC) is recognised over the period of usance of the 3) India SME Technology Services Limited (ISTSL) instruments on a constant yield basis. 4) Delhi Financial Corporation (DFC) iv. Commitment charges, service charges on 5) Receivables Exchange of India Limited (RXIL) seed capital / soft loan assistance and royalty 58 Annual Report 2018-19 APPENDIX-II income are accounted for on accrual basis in ii. Discount on Bonds and Commercial papers respect of standard (performing) assets. issued are amortized over the tenure of Bonds and Commercial Paper. The expenses relating v. Dividend on shares held in industrial concerns to issue of Bonds are amortized over the tenure and financial institutions is recognized as of the Bonds. income when the right to receive the dividend is established. 3. INVESTMENTS: vi. Income from Venture Capital funds are (i) In terms of extant guidelines of the Reserve accounted on realization basis. Redemption Bank of India on investment classification and valuation, the entire investment portfolio is of unit/shares in Venture Capital fund, while in categorized as “Held to Maturity”, “Available for HTM category is not treated as a sale. Sale” and “Held for Trading”. Investments are vii. Recovery in non-performing assets (NPA) is to valued in accordance with RBI guidelines. The be appropriated in the following order: investments under each category are further classified as: a) overdue interest upto the date of NPA, a) Government Securities, b) principal, b) Other approved securities, c) cost & charges, c) Shares, d) interest and d) Debentures & Bonds, e) penal interest. e) Subsidiaries/joint ventures and viii. Gain/loss on sale of loans and advances f) Others (Commercial Paper, Mutual Fund through direct assignment is recognized in line Units, Security Receipts, Certificate of with the extant RBI guidelines. Deposits etc.) ix. Amounts recovered against debts written-off (a) Held to Maturity: in earlier years are recognized as income in the  Investments acquired with the intention Profit & Loss account. to hold till maturity are categorized under x. Profit or loss on sale of investment: Profit or Held to Maturity. Such investments are loss on sale of investments in any category is carried at acquisition cost unless it is more than the face value, in which case taken to profit & loss account. However, in case the premium is amortized over the period of profit on sale of investments under Held to remaining to maturity. Investments Maturity category an equivalent amount is in subsidiaries are classified as Held appropriated to Capital Reserves. To Maturity. Diminution, other than xi. Amount lying as unclaimed liabilities (other temporary, in the value of investments than statutory liabilities) for a period of more under this category is provided for each than seven years are recognized as income. investment individually. xii. The bank has accounted for interest on income Held for Trading: (b) tax refunds upon receipt of such refund orders Investments acquired for resale within 90 / Order giving effects issued by Income Tax days with the intention to take advantage Department. of the short-term price/interest rate movements are categorized under Held xiii. SVCL - Management fees accrue on a for Trading. The investments in this quarterly basis from the venture capital category are revalued scrip-wise and net funds/AFIs managed by it. Interest on Fixed appreciation/depreciation is recognized deposits/tax free bonds are recognized on in the profit & loss account, with time proportion basis. The Company corresponding change in the book value of recognizes income @ 5% of the net profits the individual scrips. In respect of traded/ received from sale of investments assigned quoted investments, the market price is by IIBI taken from the trades/ quotes available on the stock exchanges. B) EXPENDITURE: i. All expenditures are accounted for on accrual (c) Available for Sale: basis except Development Expenditure which (i) Investments which do not fall within the is accounted for on cash basis. above two categories are categorized 59 Annual Report 2018-19 under Available for Sale. The individual The unquoted fixed income securities (xiii)  scrip under this category is revalued (other than government securities) are and net depreciation under any of valued on Yield to Maturity (YTM) basis the classification mentioned above is with appropriate mark-up over the YTM recognized in the profit & loss account. rates for Central Government securities Net appreciation under any classification of equivalent maturity. Such mark-up and is ignored. The book value of individual YTM rates applied are as per the relevant scrip is not changed after the revaluation. rates published by FBIL. (ii) An investment is classified as Held To 4. FOREIGN CURRENCY TRANSACTIONS Maturity, Available For Sale or Held For Foreign currency transactions are recorded in the Trading at the time of its purchase and books of account in respective foreign currencies subsequent shifting amongst categories at the exchange rate prevailing on the date of and its valuation is done in conformity transaction. Accounting for transactions involving with RBI guidelines. foreign exchange is done in accordance with (iii) Treasury Bills, Commercial Papers and Accounting Standard (AS)-11 issued by Institute of Certificates of Deposit, being discounted Chartered Accountants of India, as per following instruments, are valued at carrying cost. provisions: (iv) The quoted Government Securities are i. Contingent liability in respect of outstanding valued at market prices and unquoted/ forward exchange contracts is calculated at the non-traded government securities are contracted rates of exchange and in respect of valued at prices declared by Financial guarantees; acceptances, endorsements and Benchmark India Pvt. Ltd. (FBIL). other obligations are calculated at the closing exchange rates notified by Foreign Exchange (v) Investments which are made out of Dealers’ Association of India (‘FEDAI’). the Corpus or Funds provided by the Government of India (GOI) and netted off ii. Foreign currency Assets and Liabilities are from the related Fund balances are carried translated at the closing exchange rates notified at cost and not subject to RBI guidelines of by FEDAI as at the Balance sheet date. valuation. iii. Foreign currency Income and Expenditure (vi) Recording purchase and sale transactions items are translated at monthly intervals in Investments is done following through actual sale/purchase and recognized ‘Settlement Date’ accounting. in the profit & loss account accordingly. The debentures / bonds / shares deemed (vii)  iv. The revaluation difference on foreign currency to be in the nature of advance, are subject LoC is adjusted and recorded in a special to the usual prudential norms applicable to account opened and maintained, in consultation loans & advances. with GOI for managing exchange risk. Cost of investments is determined on the (viii)  v. The Bank follows hedge accounting in respect weighted average cost method. of foreign exchange contracts and derivative transactions as per RBI guidelines. (ix) Brokerage, commission, etc. paid at the time of acquisition/ sale are recognized in vi. Exchange differences arising on the settlement the profit & loss account. of monetary items are recognized as income or expense in the period in which they arise. (x) Broken period interest paid / received on debt investment is treated as interest vii. Outstanding Forward Exchange Contracts expenses / income and is excluded from which are not intended for trading are revalued cost / sale consideration. at closing FEDAI rates. (xi) In respect of unquoted investments in 5. DERIVATIVES industrial concerns under Seed Capital Scheme, full provision has been made. The Bank presently deals in currency derivatives viz., Cross Currency Interest Rate swaps for (xii)  Units of mutual fund are valued at hedging its foreign currency liabilities. Based on repurchase price as per relevant RBI RBI guidelines, the above derivatives undertaken guidelines. for hedging purposes are accounted on an accrual 60 Annual Report 2018-19 APPENDIX-II basis. Contingent Liabilities on account of derivative under Held for Trading / Available for Sale contracts at contracted rupee amount are reported category depending upon the investment on the Balance Sheet date. objective. 6. LOANS AND ADVANCES (ii) The Bank purchases credit rated pool of Micro, Small and Medium Enterprises assets i. Assets representing loan and other assistance under bilateral direct assignment. Such direct portfolios are classified as performing and assignment transactions are accounted for as non-performing based on the RBI guidelines. ‘advances’ by the Bank. Provision for non-performing assets is made in accordance with the RBI guidelines. The Bank enters into sale of Loans & Advances (iii)  through direct assignment. In most of the ii. Advances stated in the Balance Sheet are net of cases, the Bank continues to service the Loans provisions made for non-performing advances, & Advances sold under these transactions and and restructured assets. is entitled to the Residual interest on the Loans iii. General provision on Standard Assets is made & Advances sold. Assets sold under direct as per RBI guidelines. assignment are derecognized in the books of the Bank based on the principle of surrender of iv. Floating provision is made and utilized as per control over the assets. RBI guidelines and Board approved policy. The residual income on the Loans & Advances (iv)  7. TAXATION sold is being recognised over the life of the underlying Loans & Advances. (i) Tax expense comprises both current tax and deferred taxes. Current income tax is measured Security Receipts issued by the asset (v)   at the amount expected to be paid to the tax reconstruction companies are valued in authorities in accordance with Income Tax accordance with the guidelines applicable to Act,1961 and the Income Computation and such instruments, prescribed by RBI from time Disclosure Standards (ICDS). to time. (ii) Deferred income taxes reflects the impact of the SALE OF FINANCIAL ASSETS TO 9.   ASSET current year timing differences between taxable RECONSTRUCTION COMPANIES (ARCs): income and accounting income for the year and (i) The sale of NPA’s is on cash basis or investment reversal of timing differences of earlier years. in Security Receipt (SR) basis. In case of sale on Deferred tax is measured based on the tax SR basis, the sale consideration or part thereof rates and the tax laws enacted or substantively is treated as investment in the form of SRs. enacted at the balance sheet date. (ii) The assets if sold at a price below the Net Book (iii) Deferred tax assets are recognized only to Value (NBV) (i.e. book value less provisions the extent that there is reasonable certainty held), the shortfall is debited to the Profit & Loss that sufficient future taxable income will be A/c. In case the sale value is higher than NBV, available against which such deferred tax the excess provision held can be reversed to assets can be realised. Unrecognized deferred profit & loss account in the year the amounts assets of earlier years are re-assessed and are received. Reversal of excess provision is recognized to the extent that it has become limited to the extent to which cash received reasonably certain that future taxable income exceeds the NBV of the asset. will be available against which such deferred tax assets can be realised. 10. PROVISIONING FOR STAFF BENEFITS: (iv) Disputed taxes not provided for including Parent: departmental appeals are included under A] Post retirement benefits: Contingent Liabilities. (i) Provident Fund is a defined contribution scheme administered by the Bank and the 8. SECURITISATION contributions are charged to the Profit & Loss (i) The Bank purchases credit rated Micro, Small Account. and Medium Enterprises Asset pools from Banks / Non-Banking Finance Companies by (ii) Gratuity liability and Pension liability are way of pass- through certificates issued by the defined benefit obligations and other long Special Purpose Vehicle. Such securitisation term employee benefits like compensated transactions are classified as investments absences, post retirement medical benefits, 61 Annual Report 2018-19 leave fare concession etc. are provided based 11. FIXED ASSETS AND DEPRECIATION on the independent actuarial valuation as at a) Fixed Assets are stated at cost of acquisition the Balance sheet date using the projected unit less accumulated depreciation and impairment credit method as per AS 15 (Revised 2005) - losses, if any. Employee Benefits. b) Cost of asset includes purchase cost and all Actuarial gains or losses are recognized in (iii)  expenditure incurred on the asset before put the profit & loss account based on actuarial to use. Subsequent expenditure incurred on valuations for the period in which they occur assets put to use is capitalized only when it increases the future benefits from such assets New Pension Scheme is a defined contribution (iv)  or their functioning capability. scheme and is applicable to employees who have joined bank on or after December 01, 2011. c) Depreciation for the full year, irrespective of Bank pays fixed contribution at pre determined date of capitalization, is provided on: rate and the obligation of the Bank is limited (i) Furniture and fixture: For assets owned by to such fixed contribution. The contribution is Bank @ 100 percent charged to Profit & Loss Account. (ii) Computer and Computer Software @ 100 (v) Actuarial gains or losses are immediately taken percent to the profit and loss account and are not (iii) Building @ 5 percent on WDV basis deferred. Electrical Installations: For assets owned (iv)  (vi)  Payments made under the Voluntary by Bank @ 50 percent on WDV basis. Retirement Scheme are charged to the Profit & (v) Motor Car - Straight Line Method @ 50 Loss account in the year of expenses incurred. percent. B] Benefits (Short - term) while in service d) Depreciation on additions is provided for full Liability on account of Short term benefits are year and no depreciation is provided in the year determined on an undiscounted basis and of sale/disposal. recognised over the period of service, which e) Leasehold land is amortised over the period of entitles the employees to such benefits. lease. SVCL: 11.1 FIXED ASSETS AND DEPRECIATION (subsidiaries) Employee Benefits i) MUDRA - Fixed assets are stated at cost of  Defined Contribution Schemes: acquisition including incidental expenses. All costs Company’s Contribution to Provident Fund, etc. is directly attributable to bringing the asset to the charged to the Statement of Profit & Loss as and working condition for its intended use including when incurred. financing costs are also capitalized. Depreciation is provided on Straight Line Method on the basis of Defined Benefit Plans:  useful life under Schedule II to the Companies Act, The Company also provides for retirement benefits 2013. Assets costing ` 5,000/- or less have been in the form of gratuity. Such benefits are provided depreciated over period of one year. for based on valuation, as at the balance sheet date, made by an independent actuary. The company has ii) SVCL - Fixed Assets are stated at cost of  taken a group gratuity policy with Life Insurance acquisition. Depreciation on Fixed Assets is provided Corporation of India (“LIC”) and is funded. on Written down Value Method at the rates and in the manner prescribed in Schedule II to the Companies Performance Pay: Act, 2013. Cost of mobile / telephone instruments/ Performance Pay is an annual incentive to employees tablet devices purchased are fully charged to based on the Company’s financial performance and revenue in the year of purchase. Depreciation on employees performance. assets whose actual cost is not more than five thousand rupees has been provided at the rate of Leave Encashment: 100%. Depreciation is charged on monthly basis. The Company provides for retirement benefits in the form of leave encashment. Such benefits are PROVISION FOR CONTINGENT LIABILITIES AND 12.  provided for based on valuation, as at the balance CONTINGENT ASSETS. sheet date, made by an independent actuary. In accordance with AS-29 Provisions, Contingent Further, employees can also encash 15 days on their Liabilities and Contingent Assets, the Bank recognizes accumulated leave every financial year. provisions involving substantial degree of estimation 62 Annual Report 2018-19 APPENDIX-II in measurement when it has a present obligation as 15. IMPAIRMENT OF ASSETS a result of past event, it is probable that there will be The carrying amounts of assets are reviewed at an outflow of resources and a reliable estimate can each Balance Sheet date, if there is any indication be made of the amount of the obligation. Contingent of impairment based on internal/external factors, to Assets are neither recognized nor disclosed in the recognize, consolidated financial statements. Contingent liabilities are not provided for and are disclosed in the a) the provision for impairment loss, if any balance sheet and details given by way of Schedule required; or to the Balance Sheet. Provisions, contingent liabilities and contingent assets are reviewed at each Balance b) the reversal, if any, required for impairment loss Sheet date. recognized in the previous periods. 13. GRANTS AND SUBSIDIES Impairment loss is recognized when the carrying Grants and subsidies from the Government and amount of an asset exceeds recoverable amount. other agencies are accounted as per the terms and 16. CASH AND CASH EQUIVALENTS conditions of the agreement. Cash and cash equivalents for the purpose of cash 14. OPERATING LEASE flow statement include cash in hand, balances with Lease rentals are recognized as an expense/income RBI, balances with other banks and investment in the Profit & Loss Account as they become due for in Mutual Fund with an original maturity of three payments. months or less. 63 Annual Report 2018-19 Additional Notes to Consolidated Accounts Annexure - I 1 All the significant accounting policies as mentioned in Schedule XV of the standalone financial statements have also been followed in the preparation of consolidated financial statements. 2 The financial statements of the Bank and its subsidiary companies are combined on a line to line basis by adding together the book values of like items of Assets, Liabilities, Income and Expenses after fully eliminating intra group balances and inter group transactions in accordance with AS-21" Consolidated Financial Statements". The Associates are accounted for using the equity method as prescribed by AS-23 "Accounting for Investments in Associates in Consolidated Financial Statements". 3 Details of Subsidiaries included in consolidated financial statements are: (Amount in `) Sr. Name of the subsidiary Country of Proportion of Profit/Loss No. Incorporation ownership* March 31, 2019 March 31, 2018 1 SIDBI Venture Capital Ltd.(SVCL) India 100% 3,15,61,019 5,81,74,926 2 SIDBI Trustee Company Ltd.(STCL) India 100% 47,62,125 44,88,788 3 Micro Units Development & India 100% 28,22,34,783 1,58,21,90,607 Refinance Agency Ltd (Mudra Ltd) Total 31,85,57,927 1,64,48,54,321 Financial statements of all subsidiaries are audited for FY 2019 except Mudra Limited. *As all shares of the subsidiaries are owned by SIDBI directly or indirectly, no separate disclosure relating to minority interest is reflected. 4.A Details of Associates included in consolidated financial statements are as follows: (Amount in `) Sr. Name of the (%) Holding Description Investment Investment Share of Profit/(loss) Share in reserves * No. Associate March March March March March March March March 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 1 Acuitě Ratings 34.29 34.29 Credit Rating 4,97,50,000 5,10,00,000 5,10,00,000 98,63,924 1,32,22,177 2,68,29,742 1,36,07,565 & Research Ltd Agency for [Erstwhile SMERA SME’s Ratings Ltd (SMERA)] 2 India SME 22.72 22.72 Technology 99,96,800 1,00,00,000 1,00,00,000 18,00,797 27,04,101 68,65,267 42,19,190 Technology Support to Services Limited SME’s 3 INDIA SME ASSET 26.00** 26.00** Asset 2,60,00,000 26,00,00,000 26,00,00,000 (2,39,44,518) 34,94,723 7,78,18,091 7,44,28,865 RECONSTRUCTION Reconstruction COMPANY LIMITED Company 4 Delhi Finance 23.71 23.71 State Financial 3,13,87,500 3,13,87,500 3,13,87,500 - 19,23,661 11,33,04,245 11,35,43,183 Corporation Corporation 5 Receivables 30.00 30.00 Online platform 7,50,00,000 7,50,00,000 7,50,00,000 (1,17,68,479) (1,66,36,829) (2,48,55,859) (85,90,142) Exchange of India for factoring Limited # / discounting of Trade Receivables (TReDS) 6 APITCO LIMITED 41.29 41.29 Technical 80,00,000 54,70,975 54,70,975 (1,63,14,522) - 5,29,48,734 - consultancy Organisation 7 KITCO LIMITED 49.77 49.77 Technical 4,90,00,000 24,95,296 24,95,296 22,25,39,362 - 22,25,39,362 - consultancy Organisation Total 43,53,53,771 43,53,53,771 18,21,76,564 47,07,833 47,54,49,582 19,72,08,660 * Included in Reserve Fund of ` 1,10,75,55,22,814 (Previous year ` 98,31,69,76,210) in Schedule II A(i) of the Consolidated Balance sheet. ** Includes 11% holding by SVCL (100% subsidiary of SIDBI). # Considered on financials based on Ind-AS for year 31 March 2019 unaudited. 64 Annual Report 2018-19 APPENDIX-II B  The results of the following associates are not included in the consolidated financial statements. However, full provision has been made in the financial statements for diminution in value of investment. (Amount in `) Sr. Name (%) Holding Description Investment Diminution in value of No. of the Investment Associate March March March March 31, 2019 31, 2018 31, 2019 31, 2018 1 BSFC 48.43 48.43 State Financial Corporation 18,84,88,500 (18,84,88,500) (18,84,88,500) 2 GSFC 28.41 28.41 State Financial Corporation 12,66,00,000 (12,66,00,000) (12,66,00,000) 3 JKSFC 23.00 23.00 State Financial Corporation 3,42,20,000 (3,42,20,000) (3,42,20,000) 4 MSFC 39.99 39.99 State Financial Corporation 12,52,41,750 (12,52,41,750) (12,52,41,750) 5 PFC 25.92 25.92 State Financial Corporation 5,23,51,850 (5,23,51,850) (5,23,51,850) 6 UPSFC 20.27 20.27 State Financial Corporation 21,67,59,000 (21,67,59,000) (21,67,59,000) Total 74,36,61,100 (74,36,61,100) (74,36,61,100)  Financial statements of the associates other than State Financial Corporation’s (SFC) mentioned in 4A and 4B are unaudited for the year ended March 31,2019. Regarding KITCO and APITCO, the figures are audited for the year ended on March 31, 2018. The figures for SFC’s other than MSFC, PFC and UPSFC are based on audited results for the year ended March 31, 2017. Regarding MSFC and PFC, figures are based on audited results for the year ended March 31, 2016. In respect of UPSFC, provisional results are available for the year ended March 31, 2012. Regarding BSFC and GSFC, the figures are for the year ended March 31, 2018 audited. C In case of following entities, though the bank holds more than 20% of voting power, they are not treated as investment in associate under AS 23 ‘Accounting for Investment in Associates in Consolidated Financial Statements’, because they are not considered as material investments requiring consolidation. (Amount in `) Sr. Name of the Associate (%) Holding Description Investment No. March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 1 Bihar Industrial and 49.25 49.25 Technical 1 1 Technical Consultancy Consultancy Organisation Ltd. Organisation 2 North Eastern 43.44 43.44 Technical 1 1 Industrial and Consultancy Technical Consultancy Organisation Organisation Ltd. 3 Orissa Industrial and 49.42 49.42 Technical 1 1 Technical Consultancy Consultancy Organisation Ltd. Organisation 4 WEBCON Consulting 21.67 21.67 Technical - 4,86,783 (India) Ltd. Consultancy (Erstwhile West Organisation Bengal Consultancy Organisation Ltd.) # Total 3 4,86,786 # Stake in WEBCON Consulting (India) Ltd. (Erstwhile West Bengal Consultancy Organisation Ltd.) has been divested during FY 2019. 65 Annual Report 2018-19 5 Details of significant transaction with associate are as under: (Amount in `) Sr. Name of the Particulars Disbursements Repayments (including interests) No. Associate March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 1 DFC Refinance assistance - - 5,59,00,000.00 5,06,54,683 6 As against depreciation policy of SIDBI whereby assets are depreciated on SLM / WDV at pre-determined rates, the subsidiaries and associates compute depreciation on SLM/ WDV basis as per Schedule II of the Companies Act, 2013. Thus out of the total depreciation of ` 18,43,71,236 (Previous Year ` 11,44,13,211) included in Consolidated Financial Statements, ` 16,75,273 being 0.90% (Previous Year ` 1,015,704 being 0.89%) of the amount is determined based on Depreciation provided as per the Companies Act, 2013. 7 Aggregate remuneration paid to whole time director of SIDBI is ` 93,15,485 (Previous year ` 74,00,120), SVCL is ` 58,74,807/- (Previous Year ` 40,19,260) and Mudra Ltd. is ` 34,58,626/- (Previous Year ` 97,71,989). 8 Employee Benefits (i) SIDBI In accordance with the Accounting Standard on “Employee Benefits” (AS 15) (Revised 2005) issued by the Institute of Chartered Accountants of India, the Bank has classified the various benefits provided to the employees as under: (a) Defined contribution plan The Bank has recognized the following amounts in Profit & Loss Account: (Amount in `) Particulars March 31, 2019 March 31, 2018 Employer’s contribution to Provident fund 8,45,92,109 5,83,87,971 Employer’s contribution to New Pension Scheme 2,27,84,810 1,91,20,772 (b) The Bank is having defined benefit Pension Plans and Gratuity Scheme which are managed by the Trust. (` crore) Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 1. Assumptions Discount Rate 7.78% 7.72% 7.64% 7.73% Rate of Return on Plan Assets 7.78% 7.72% 7.64% 7.73% Salary Escalation 5.50% 6.00% 5.50% 6.00% Attrition rate 2.00% 2.00% 2.00% 2.00% 2. Table showing change in Benefit Obligation Liability at the beginning of the year 452.03 408.10 111.05 75.49 Interest Cost 34.94 29.42 8.59 5.50 Current Service Cost 12.05 12.73 4.47 5.27 Past Service Cost (Non Vested Benefit) - - - - Past Service Cost (Vested Benefit) - - - 31.43 Liability Transferred in - - - - (Liability Transferred out) - - - - (Benefit Paid) (24.25) - (12.40) (4.58) Actuarial (gain) / loss on obligations (35.12) 1.78 (20.35) (2.06) Liability at the end of the year 439.65 452.03 91.36 111.05 66 Annual Report 2018-19 APPENDIX-II (` crore) Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 3. Tables of Fair value of Plan Assets Fair Value of Plan Assets at the beginning of the year 405.46 98.07 115.25 111.78 Expected Return on Plan Assets 31.34 7.07 8.43 8.15 Contributions - 300.00 0.05 - Transfer from other company - - - - (Transfer to other company) - - - - (Benefit Paid) (24.25) - (12.40) (4.58) Actuarial gain / (loss) on Plan Assets (2.32) 0.32 (0.35) (0.10) Fair Value of Plan Assets at the end of the year 410.23 405.46 110.98 115.25 4. Table of Recognition of Actuarial Gains/ Losses Actuarial (Gains)/ Losses on obligation for the period (35.12) 1.78 (20.35) (2.07) Actuarial (Gains)/ Losses on asset for the period 2.32 (0.32) 0.35 0.10 Actuarial (Gains)/ Losses recognized in Income & Expense (32.80) 1.46 (20.00) (1.97) Statement 5. Actual Return on Plan Assets Expected Return on Plan Assets 31.34 7.07 8.43 8.15 Actuarial Gain / (Loss) on Plan Assets (2.32) 0.32 (0.35) (0.10) Actual Return on Plan Assets 29.02 7.39 8.08 8.05 6. Amount Recognised in the Balance Sheet Liability at the end of the year (439.65) (452.03) (91.36) (111.05) Fair Value of Plan Assets at the end of the year 410.23 405.46 110.98 115.25 Difference (29.42) (46.56) 19.62 4.20 Unrecognised Past Service Cost at the end of the year - - - - Unrecognised Transitional Liability at the end of the year - - - - Net Amount recognised in the Balance Sheet (29.42) (46.56) 19.62 4.20 7. Expenses Recognised in the Income Statement Current Service Cost 12.05 12.73 4.47 5.27 Interest Cost 34.94 22.35 8.59 (2.64) Expected Return on Plan Assets (31.34) - (8.43) (1.97) Past Service Cost (Non Vested Benefit) recognised during - - - - the year Past Service Cost (Vested Benefit) recognised during the - - - 31.43 year Recognition of Transition Liability during the year - - - - Actuarial (Gain) / Loss (32.80) 1.46 (20.00) - Expense Recognised in Profit & Loss account (17.15) 36.54 (15.37) 32.09 67 Annual Report 2018-19 (` crore) Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 8. Balance Sheet Reconciliation Opening Net Liability 46.57 310.02 (4.20) (36.29) Expense as above (17.15) 36.54 (15.37) 32.09 Employers Contribution - (300.00) (0.05) - Amount recognised in the Balance Sheet 29.42 46.56 (19.62) (4.20) 9. Other Details Salary escalation is considered as advised by the Bank which is in line with the industry practice considering promotion, demand and supply of the employees. (` crore) Pension Gratuity FY 2019 FY 2018 FY 2019 FY 2018 10. Category of Assets Government of India Assets - - - - Corporate Bonds - - - - Special Deposits Scheme - - - - Equity Shares of Listed Companies - - - - Property - - - - Insurer Managed Funds (LIC of India) 410.23 405.46 110.98 115.25 Other - - - - Total 410.23 405.46 110.98 115.25 11. Experience Adjustment: (` crore) Pension Gratuity FY FY FY FY FY FY FY FY FY FY 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 On Plan Liability (Gain)/Loss (22.03) 66.81 (5.53) 22.70 (0.90) 19.71 10.18 (7.91) (6.20) (0.56) On Plan Asset (Loss)/Gain (2.32) 0.32 0.58 (0.17) (1.43) (0.35) (0.10) 0.29 (0.40) 0.21 The following are the amount charged to Profit & Loss Account relating to other long term benefits plan based (c)  on the actuarial valuation provided by independent actuary. (` crore) Sr. No Particulars March 31, 2019 March 31, 2018 1 Ordinary Leave Encashment 20.63 11.84 2 Sick Leave - 5.49 3 Resettlement Expenses 0.88 - 4 Post Retirement Medical Scheme Facilities 0.43 (3.51) 68 Annual Report 2018-19 APPENDIX-II (ii) SVCL During the year, company has contributed a sum of ` 24,45,491/- to the SIDBI Venture Capital Limited Employees’ Group Gratuity Assurance Scheme (Trust) for its employees Details Post Employment Benefits FY 2019 FY 2018 Nature of benefit Gratuity Gratuity Assets & liabilities recognized in balance sheet Present value of unfunded defined benefit obligations Nil Nil Present value of funded or partly funded defined benefit ` 57,95,242 ` 49,60,831 obligations Fair value of plan assets ` 60,35,156 ` 36,40,759 Past service cost not recognized in balance sheet Nil Nil Any amount nor recognized as asset Nil Nil Fair value of any reimbursement rights recognized as asset Nil Nil Other amounts, if any, recognized in balance sheet Nil Nil Amounts included in fair value of plan assets: Own financial instruments Nil Nil Property or other assets used Nil Nil Insurer managed funds ` 60,35,156 ` 36,40,759 Movement in net liability: Opening net liability ` 13,20,072 ` 11,23,720 Expenses ` 8,85,505 ` 2,36,210 Contribution (` 24,45,491) (` 39,858) Closing net liability (` 2,39,914) ` 13,20,072 Expenses recognized in statement of profit & loss Current service cost ` 3,51,414 ` 3,63,229 Interest cost ` 4,01,331 ` 3,64,211 Expected return on plan assets (` 2,94,537) (` 2,78,359) Expected return on reimbursement rights N.A. N.A. Actuarial gains / (losses) (` 4,27,297) ` 17,39,236 Total expenses recognized in statement of profit & loss ` 8,85,505 ` 2,36,210 Past service cost Nil ` 15,26,365 Effect of curtailment / settlement Nil Nil Effect of limit in para 59(b) N.A. N.A. Actual return of plan assets and on reimbursement rights Nil Nil recognized as asset Actuarial Assumptions Discount rates 8.09% 8.09% Expected rate of returns on plan assets 8.09% 8.09% Expected rate of returns on reimbursement rights Nil Nil Expected rate of salary increase 5.00% 5.00% Medical cost trends N.A. N.A. Mortality Indian Assured Lives Indian Assured Lives Mortality (2006-08) Mortality (2006-08) Disability Nil Nil Attrition 2.00% 2.00% Retirement age 60 Years 60 Years 69 Annual Report 2018-19 (iii) MUDRA (a) As most of the employees are on deputation from Small Industrial Development Bank of India (SIDBI) / National bank for Agriculture and Rural Development (NABARD), Gratuity, Leave Encashment and Arrears of Salary in respect of employees deputed to MUDRA are taken care by the employer, who have deputed the employees to this company. However the MUDRA has provided an amount of ` 6,53,57,119/- to P& L A/c during the current Year. The same would be paid to SIDBI/NABARD when such costs are demanded by the said companies. (b) Therefore no disclosures are required under 'Revised AS 15- Employees Benefit’ issued under Companies Accounting Standard Rules, 2006' 9 Earning Per Share (EPS)*: March 31, 2019 March 31, 2018 Net Profit considered for EPS calculation (`) 19,59,28,48,581 15,77,01,27,573 Weighted Average Number of equity shares of face value ` 10 each 53,19,22,031 53,19,22,031 Earning per share (`) 36.83 29.65 * Basic & Diluted EPS are same as there are no dilutive potential Equity Shares. 10 As per the Accounting Standard 22, Accounting for Taxes on Income, the Bank has reviewed the Deferred Tax Expenditure / Saving and recognised an amount of ` 1,55,60,01,189/- as Deferred Tax Asset (Previous year - Deferred Tax Asset was ` 58,02,30,296/-) in the Profit and Loss Account for the year ended March 31, 2019. The Break up of Deferred Tax Asset/ (Liability) as on March 31, 2019 is as follows: Sr. Deferred Tax Asset/(Liability) No. FY 2019 (`) FY 2018 (`) 1 Provision for Depreciation 39,60,413 (1,20,11,396) 2 Special Reserve u/s 36(1)(viii) of the Income Tax Act 1961 (4,70,90,89,576) (4,44,78,09,616) 3 Provisions for Bad & Doubtful Debts 2,30,45,14,771 2,53,21,09,985 4 Amortisation of Premium on GOI Bonds (4,44,56,921) (5,86,23,034) 5 Provision for Restructuring of Accounts 1,22,49,123 1,66,89,571 6 Brought Forward Long Term Capital Loss 22,05,17,373 7 Provision for Non Performing Investment 85,10,68,098 8 Provision for Standard Assets 58,61,97,116 9 Others 1,53,46,81,634 1,17,33,67,554 Net deferred tax Asset/(Liability) 75,96,42,030 (79,62,76,936) 11 Contingent Liabilities Estimated amount of contracts remaining to be executed on capital account not provided for (net of advance paid) is ` 2,92,86,993/- (Previous year ` 1,02,46,63,903/-) 12  Additional statutory information disclosed in separate financial statements of the parent and the subsidiaries have no bearing on the true and fair view of the Consolidated Financial Statements and also the information pertaining to the items which are not material have not been disclosed in the Consolidated Financial Statements in view of the general clarification issued by the Institute of Chartered Accountants of India (ICAI). 70 Annual Report 2018-19 APPENDIX-II Additional consolidated Disclosures as per RBI Guidelines 1. Capital adequacy (` crore) Sr. No Particulars FY 2018-19 FY 2017-18 i) Common Equity* Not Applicable Not Applicable ii)       Additional Tier 1 capital* Not Applicable Not Applicable iii) Total Tier 1 capital 17,271.00 15,716.32 iv) Tier 2 capital 597.96 425.04 v)      Total Capital (Tier 1+Tier 2) 17,868.96 16,141.36 vi) Total Risk Weighted Assets (RWAs) 54,145.42 47,454.90 vii)    Common Equity Ratio Not Applicable Not Applicable (Common Equity as a percentage of RWAs) * viii)   Tier 1 Ratio (Tier 1 capital as a percentage of RWAs) 31.90% 33.12% ix)     Capital to Risk Weighted Assets Ratio (CRAR) 33.00% 34.01% (Total Capital as a percentage of RWAs) x)      Percentage of the shareholding of the Government of India 15.40 15.40 xi)     Amount of equity capital raised - - xii) Amount of Additional Tier 1 capital raised; of which - - a.) Perpetual Non-Cumulative Preference Shares (PNCPS): - - b.) Perpetual Debt Instruments (PDI) - - xiii) Amount of Tier 2 capital raised; of which - - a.) Debt capital instruments: - - b.) Perpetual Cumulative Preference Shares (PCPS) - - c.) Redeemable Non-Cumulative Preference Shares (RNCPS) - - d.) Redeemable Cumulative Preference Shares (RCPS) - - * The figures are not being calculated at present, since BASEL-III is not applicable. 2. Free Reserves and Provisions (a) Provision on Standard Assets (` crore) Particulars FY 2018-19 FY 2017-18 Provisions towards Standard Assets (cumulative) 597.97 425.04 (b) Floating Provisions (` crore) Particulars FY 2018-19 FY 2017-18 Opening balance in the floating provisions account 1,742.21 2,057.81 The quantum of floating provisions made in the accounting year - - Amount of draw down made during the accounting year* 393.68 315.6** Closing balance in the floating provisions account 1,348.53 1,742.21 * Amount was utilised for making NPA/NPI provisions as per the Bank's Board approved policy on floating provision ** The amount was utilized for making NPA provisions as per the bank's approved policy on floating provision. 71 Annual Report 2018-19 3. Asset Quality and specific provisions (a) Non-Performing Advances (` crore) Particulars FY 2018-19 FY 2017-18 (i) Net NPAs to Net Advances (%) 0.20% 0.24% (ii) Movement of NPAs (Gross) (a)    Opening balance 902.42 823.28 (b)    Additions during the year 309.60 424.42 (c)    Reductions during the year 344.11 345.28 (d)    Closing balance 867.91 902.42 (iii) Movement of Net NPAs * (a)    Opening balance 250.63 302.25 (b)    Additions during the year 108.62 28.62 (c)    Reductions during the year 66.70 80.24 (d)    Closing balance 292.55 250.63 (iv) Movement of provisions for NPAs (excluding provisions on standard assets) (a)    Opening balance 651.78 521.03 (b)    Provisions made during the year 201.51 408.70 (c)    Write off / write back of excess provisions 277.94 277.95 (d)    Closing balance 575.35 651.78 * The Net NPA will be NIL for the current year and previous year, if the amount of floating provision is adjusted against the same. (b) Non-Performing Investments (` crore) Particulars FY 2018-19 FY 2017-18 (i) Net NPIs to Net Investments (%) 13.01% - (ii) Movement of NPIs (Gross) (a)    Opening balance 410.03 419.60 (b)    Additions during the year 1,240.69 9.81 (c)    Reductions during the year 73.55 19.38 (d)    Closing balance 1,577.17 410.03 (iii) Movement of Net NPIs (a)    Opening balance - - (b)    Additions during the year 993.44 - (c)    Reductions during the year - - (d)    Closing balance 993.44 - (iv) Movement of provisions for NPIs (excluding provisions on standard assets) (a)    Opening balance 410.03 419.60 (b)    Provisions made during the year 532.25 9.81 (c)    Write off / write back of excess provisions 73.55 19.38 (d)    Closing balance 868.73 410.03 72 Annual Report 2018-19 APPENDIX-II (c) Non-Performing Assets (a+b) (` crore) Particulars FY 2018-19 FY 2017-18 (i) Net NPAs to Net Assets (Advanced + investments) (%) 0.83% 0.22% (ii) Movement of NPAs (Gross Advances + Gross investments) (a)    Opening balance 1,312.45 1,242.88 (b)    Additions during the year 1,550.29 434.23 (c)    Reductions during the year 417.66 364.67 (d)    Closing balance 2,445.08 1,312.45 (iii) Movement of Net NPAs (a)    Opening balance 250.63 302.25 (b)    Additions during the year 1,102.05 28.62 (c)    Reductions during the year 66.70 80.24 (d)    Closing balance 1,285.98 250.63 Movement of provisions for NPAs (iv)  (excluding provisions on standard assets) (a)    Opening balance 1,061.81 940.63 (b)    Provisions made during the year 733.77 418.51 (c)    Write off / write back of excess provisions 351.49 297.33 (d)    Closing balance 1,444.09 1,061.81 73 Annual Report 2018-19 3 (d) Accounts Restructured 74 Disclosure of Restructured Accounts (` crore) Sl Type of Restructuring  Under CDR Mechanism Under SME Debt Restructuring Mechanism Others Total Asset Classification  Standard Sub- Doubtful Loss Total Standard Sub- Doubtful Loss Total Standard Sub- Doubtful Loss Total Standard Sub- Doubtful Loss Total Details  Standard Standard Standard Standard 1 Restructured No. of Borrowers - - 1 - 1 - - - - - 15 12 31 - 58 15 12 32 - 59 Accounts as on Amount - - 37.19 - 37.19 - - - - - 74.69 57.78 98.32 - 230.79 74.69 57.78 135.51 - 267.98 April 1 of the FY outstanding (opening figures)* Provision thereon - - - - - - - - - - (0.08) 0.23 0.48 - 0.63 (0.08) 0.23 0.48 - 0.63 Annual Report 2018-19 2 Fresh restructuring No. of Borrowers - - - - - - - - - - 14 8 1 - 23 14 8 1 - 23 during the year Amount - - - - - - - - - - 57 9 5 - 71.22 56.93 9.49 4.80 - 71.22 outstanding Provision thereon - - - - - - - - - - 0 0 - - 0.41 0.26 0.15 - - 0.41 3 Upgradations No. of Borrowers - - - - - - - - - - 2 - (2) - - 2 0 (2) - - to restructured Amount - - - - - - - - - - 2 - (2) - - 2.02 (0.05) (1.97) - - standard category outstanding during the FY Provision thereon - - - - - - - - - - - - - - - 0.04 - (0.04) - - 4 Restructured No. of Borrowers - - - - (9) (9) (9) (9) standard advances Amount - - - - (28) (28.16) (28.16) (28.16) which cease to outstanding attract higher provisioning and / or additional risk weight at Provision thereon - - - - - (0.05) (0.05) (0.05) the end of the FY and hence need not be shown as restructured standard advances at the beginning of the next FY 5 Downgradations No. of Borrowers - - - - - - - - - - (1) (7) 8 - - (1) (7) 8 - - of restructured Amount - - - - - - - - - - (11) (57) 68 - - (11.01) (57.31) 68.32 - - accounts during outstanding the FY Provision thereon - - - - - - - - - - - - - - - - (0.11) 0.11 - - 6 Write-offs of No. of Borrowers - - (1) - (1) - - - - - (1) (2) (4) - (7) (1) (2) (5) - (8) restructured Amount - - (37) - (37) - - - - - (15) (21) (21) - (57.41) (15.27) (21.03) (58.30) - (94.60) accounts during outstanding the FY# Provision thereon - - - - - - - - - - - - - - (0.45) - (0.04) (0.40) - (0.45) 7 Restructured No. of Borrowers - - - - - - - - - - 20 11 34 - 65 20 11 34 - 65 Accounts as on Amount - - - - - - - - - - 79.19 (11.12) 148.36 - 216.43 79.19 (11.12) 148.36 - 216.43 March 31 of the FY outstanding (closing figures)* Provision - - - - - - - - - - 0.17 0.22 0.15 - 0.55 0.17 0.22 0.15 - 0.55 thereon * Excluding the figures of Standard Restructured Advances which do not attract higher provisioning or risk weight (if applicable). Note: Figures at Sr. No.6 includes ` 28.92 crore (33 borrower & provisions of ` 0.45 crore) which is reduction/recovery from existing restructured accounts and closure of 5 borrower amounting to ` 16.09 crore by way of recovery. # Incluiding reduction of restructure account. APPENDIX-II (e) Movement of Non-performing assets (` crore) Particulars FY 2018-19 FY 2017-18 Gross NPAs as on April 01, 2018 902.42 823.28 Additions (Fresh NPAs) during the year 594.60 424.42 Sub total (A) 1,497.02 1,247.70 Less:- (i) Upgradations 8.46 17.15 (ii) Recoveries (excluding recoveries made from upgraded accounts) 113.76 133.45 (iii) Technical / Prudential Write offs 221.79 187.75 (iv) Write offs other than those under (iii) above 0.10 6.93 Sub-total (B) 344.11 345.28 Gross NPAs as on March 31, 2019 (A-B) 1,152.91 902.42 (f) Write-offs and recoveries (` crore) Particulars FY 2018-19 FY 2017-18 Opening balance of Technical / Prudential written off accounts as at 1,458.52 1,573.68 April 1, 2018 Add: Technical / Prudential write offs during the year 221.79 187.75 Sub total (A) 1,680.31 1,761.43 Less: Actual write off 87.51 1.81 Less: Recoveries made from previously technical / prudential written 29.51 301.11 off accounts during the year Sub total (B) 117.02 302.91 Closing balance as at March 31, 2019 (A-B) 1,563.29 1,458.52 (g) Overseas Assets, NPAs and Revenue Particulars FY 2018-19 FY 2017-18 Total Assets - - Total NPAs - - Total Revenue - - 75 Annual Report 2018-19 (h) Depreciation and provisions on investments (` crore) Particulars FY 2018-19 FY 2017-18 (1) Investments (i)    Gross Investments 10,113.03 9,200.42 (a) In India 10,113.03 9,200.42 (b) Outside India - - (ii) Provisions for Depreciation 874.99 460.22 (a) In India 874.99 460.22 (b) Outside India - - (iii) Net Investments 9,238.04 8,740.20 (a) In India 9,238.04 8,740.20 (b) Outside India - - Movement of provisions held towards depreciation on (2)  - - investments (i) Opening balance 50.01 48.77 (ii) Add: Provisions made during the year 291.65 4.21 Appropriation, if any, from Investment Fluctuation Reserve (iii)  - - Account during the year Less: Write off / write back of excess provisions during (iv)  - 2.97 the year (v) Less: Transfer, if any, to Investment Fluctuation Reserve 50.58 - Account* (vi) Closing balance 341.66 50.01 * Transfer to Investment Fluctuation Reserve is net of provision of ` 44.22 crore made during FY 2018-19 and Nil made during FY 2017-18. (i) Provisions and Contingencies (` crore) Break up of ‘Provisions and Contingencies’ shown under the head FY 2018-19 FY 2017-18 Expenditure in Profit and Loss Account Provisions for depreciation/NPI on Investment # 186.68 (7.54) Provision towards NPA# (1.32) - Provision made towards Income tax 770.90 630.74 (Including Deferred Tax Assets/Liability) Other Provision and Contingencies (with details)$ 102.61 73.82 # Net of write back of floating provision. $ Provision for standard asset. (j) Provisioning Coverage Ratio (PCR) FY 2018-19 FY 2017-18 Provisioning Coverage Ratio (PCR)* 87% 89% * Floating provision has not been considered while calculating PCR. 76 Annual Report 2018-19 APPENDIX-II (k) Disclosures on Flexible Structuring of Existing Loans (` crore) Period No. of Amount of loans taken up for Exposure weighted average borrowers flexible structuring duration of loans taken up for taken up flexible structuring for flexibly Classified as Classified as Before After applying structuring Standard NPA applying flexible flexible structuring structuring Previous Year FY 2017-18 - - - - - Current Year FY 2018-19 - - - - -  isclosures on Strategic Debt Restructuring Scheme (accounts which are currently under the stand-still (l) D period) (` crore) No. of accounts where Amount outstanding as Amount outstanding as Amount outstanding as SDR has been invoked on the reporting date on the reporting date on the reporting date with respect to accounts with respect to accounts where conversion of debt where conversion of debt to equity is pending to equity has taken place Classified Classified Classified Classified Classified Classified as standard as NPA as standard as NPA as standard as NPA - - Nil - - - Nil (m)   Disclosures on Change in Ownership outside SDR Scheme (accounts which are currently under the stand-still period) No. of Amount outstanding as Amount outstanding Amount outstanding Amount outstanding accounts on the reporting date as on the reporting as on the reporting as on the reporting where date with respect date with respect date with respect banks to accounts where to accounts where to accounts where have conversion of debt to conversion of debt to change in ownership is decided equity/invocation of equity/invocation of envisaged by issuance to effect pledge of equity shares pledge of equity shares of fresh shares or sale change in is pending has taken place of promoters equity ownership Classified Classified Classified Classified Classified Classified Classified Classified as standard as NPA as standard as NPA as standard as NPA as standard as NPA - - - - - - - - -  isclosures on Change in Ownership of Projects Under Implementation (accounts which are currently under (n) D the stand-still period) No. of project loan accounts Amount outstanding as on the reporting date where banks have decided to Classified as standard Classified as standard Classified as NPA effect change in ownership restructured - - - - (o) Disclosures on the Scheme for Sustainable Structuring of Stressed Assets (S4A), as on March 31, 2019 No. of accounts where S4A has Aggregate Amount outstanding Provision been applied amount In Part A In Part B Held Classified as Standard - - - - Classified as NPA - - - - 77 Annual Report 2018-19 4. Investment portfolio: constitution and operations (a) Repo Transactions Minimum Maximum Daily Average Outstanding outstanding outstanding outstanding as on March during the during the during the 31, 2019 year year year Securities sold under repo i. Government securities - - - - ii. Corporate debt securities - - - - Securities purchased under reverse repo i. Government securities - - - - ii. Corporate debt securities - - - - (b) Disclosure of Issuer Composition for Investment in Debt Securities (` crore) Amount of Investment Below Unrated Unlisted Issuer Amount made through Investment securities securities private Grade held placement Securities Held (1) (2) (3) (4) (5) (6) (i) PSUs 524.23 - - - (ii) FIs 1,224.42 96.94 - 78.55 103.00 (iii) Banks 3,385.50 25.00 - 103.50 103.50 (iv) Private Corporates 613.30 197.15 - 385.40 345.84 (v) Subsidiaries/Joint ventures - - (vi) Others 2,314.24 967.45 - 967.45 1,467.45 Provision held towards (vii)  -588.90 - depreciation Total 7,472.79 1,286.53 - 1,534.90 2,019.79 (c) Sale & transfers of securities to /from HTM category: D  uring the current FY, the Bank has shifted G-Securities held under AFS category to HTM category as approved by board dated 06/04/2018. The total outstanding of G-Sec portfolio as on date of Shifting was ` 452.83 crore (Face Value). Except for the above, there was no shifting of investments to/from HTM category. 5. Details of Financial Assets purchased/ sold (a) Details of Financial Assets sold to Securitisation / Reconstruction Company for Asset Reconstruction (i) Details of Sales (` crore) Particulars FY 2018-19 FY 2017-18 (i) No. of accounts (borrower) 1 105 (ii) Aggregate value (net of provisions) of accounts sold to - - SC/RC (iii) Aggregate consideration 15 64.07 Additional consideration realized in respect of accounts (iv)  28.05 - transferred in earlier years (v) Aggregate gain / loss over net book value 3.3 9.61 78 Annual Report 2018-19 APPENDIX-II (ii) Details of Book Value of Investments in Security Receipts (` crore) Particulars Book value of investments in security receipt FY 2018-19 FY 2017-18 (i) Backed by NPAs sold by the AIFI as underlying 0.27 9.76 Backed by NPAs sold by banks / other financial institutions (ii)  - - / non-banking financial companies as underlying Total 0.27 9.76 (b) Details of Non Performing Financial Assets Purchased / Sold (i) Details of non performing financial assets purchased: Particulars FY 2018-19 FY 2017-18 1. (a) No. of accounts purchased during the year - - (b) Aggregate outstanding - - 2. (a) Of these, number of accounts restructured during the year - - (b) Aggregate outstanding - - (ii) Details of non performing financial assets sold: (` crore) Particulars FY 2018-19 FY 2017-18 1. No. of accounts sold 1 105 2. Aggregate outstanding 76.44 114.07 3. Aggregate consideration received 15.00 64.07 6. Operating Results Particulars FY 2018-19 FY 2017-18 (i) Interest income as a percentage to average working funds 6.82 6.86 Non-interest income as a percentage to average working funds (ii)  0.32 0.55 Operating profit as a percentage to average working funds (iii)  1.87 2.28 (before provisions) Return on average assets (before provisions for taxation) (iv)  1.68 2.21 (v) Net Profit per employee (` crore) 1.77 1.39 79 Annual Report 2018-19 7. Credit Concentration risk (a) Capital market exposure (` crore) Particulars FY 2018-19 FY 2017-18 (i) direct investment in equity shares, convertible bonds, 499.27 570.66 convertible debentures and units of equity oriented mutual funds the corpus of which is not exclusively invested in corporate debt; (ii) advances against shares / bonds / debentures or other securities - - or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity oriented mutual funds; (iii) advances for any other purposes where shares or convertible - - bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security; advances for any other purposes to the extent secured by the (iv)  - - collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances; (v) secured and unsecured advances to stockbrokers and - - guarantees issued on behalf of stockbrokers and market makers; loans sanctioned to corporates against the security of shares (vi)    - - / bonds / debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources; bridge loans to companies against expected equity flows / (vii)  - - issues; underwriting commitments taken up by the banks in respect (viii)  - - of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds; financing to stockbrokers for margin trading; (ix)  - - (x) all exposures to Venture Capital Funds 1,600.50 2,796.00 (both registered and unregistered) Total Exposure to Capital Market 2,099.77 3,366.66 (b) Exposure to Country risk The bank had no overseas exposure during the current year and previous year. (c) Prudential Exposure Limits - Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the AIFI (i) The number and amount (not the name of the borrower) of exposures in excess of the prudential exposure limits during the year. Sl. PAN Borrower Industry Industry Sector Amount Amount Exposure No. Number Name Code Name Funded Non-Funded as % to Capital Funds - - - - - - - - - 80 Annual Report 2018-19 APPENDIX-II (ii) Credit exposure as percentage to capital funds and as percentage to total assets, in respect of: Sr. Particulars FY 2018-19 FY 2017-18 No. As % to As % to As % to As % to Total Assets Capital funds Total Assets Capital funds 1. The largest single borrower 8.90 85.44 9.49 73.10 The largest borrower group As large borrowers are Primary lending Institutions, the concept of borrower group is not applicable. 2. The 20 largest single borrowers 70.96 680.91 66.95 515.69 The 20 largest borrower group As large borrowers are Primary lending Institutions, the concept of borrower group is not applicable. (iii) Credit exposure to the five largest industrial sectors as percentage to total loan assets: (` crore) Name of Industry FY 2018-19 FY 2017-18 Amount % to total Amount % to total Outstanding loan assets Outstanding loan assets TRANSPORT EQUIPMENT 1,492.04 1.01 1,418.29 1.35 AUTO ANCILLARIES 815.70 0.55 1,146.56 1.09 COMMERCIAL VEHICLES 813.53 0.55 315.65 0.30 METAL PRODUCTS N.E.C. 496.71 0.34 413.56 0.39 METAL PRODUCTS PARTS EXCEPT 432.30 0.29 394.68 0.37 MACHINERY (iv) Total amount of advances for which intangible securities such as charge over the rights, licenses, authority etc. has been taken is Nil as on March 31, 2019 and the estimated value of intangible security as on March 31, 2019 is Nil. (v) The bank had no factoring exposure during the current year and previous year. (vi) The bank had not exceeded the Prudential Exposure Limits during the current year and previous year. (d) Concentration of borrowings /lines of credit, credit exposures and NPAs (i) Concentration of borrowings and lines of credit (` crore) Particulars FY 2018-19 FY 2017-18 Total borrowings from twenty largest lenders 96,518.43 58,482.38 Percentage of borrowings from twenty largest lenders to 65.83% 57.41% total borrowings (ii) Concentration of Exposures (` crore) Particulars FY 2018-19 FY 2017-18 Total advances to twenty largest borrowers 1,21,147.33 74,274.86 Percentage of advances to twenty largest borrowers to 81.81% 70.51% Total Advances Total Exposure to twenty largest borrowers / customers 1,10,673.09 83,239.27 Percentage of exposures to twenty largest borrowers / 74.82% 66.97% customers to Total Exposure 81 Annual Report 2018-19 (iii) Sector-wise concentration of exposures and NPAs (` crore) Sr. Sector FY 2018-19 FY 2017-18 No. Outstanding Gross Percentage of Outstanding Gross Percentage of Total NPAs Gross NPAs to Total NPAs Gross NPAs to Advances Total Advances Advances Total Advances in that sector in that sector I. Industrial sector 1,31,112.35 860.68 0.66% 87,186.15 894.66 1.03% 1. Central Government - - - 2. Central PSUs - - - 3. State Governments - - - 4. State PSUs 295.25 111.05 37.61% 257.19 0.10 0.04% 5. Scheduled 1,20,550.44 - - 76,087.06 - - Commercial Banks 6. Regional Rural 314.97 - - 520.87 - - Banks 7. Co-operative banks - - - - - - 8. Private sector 9,951.70 749.63 7.53% 10,321.03 894.56 8.67% (excluding banks) II. Micro-finance sector 1,657.27 7.23 - 2,176.59 7.76 - III. Others* 15,883.04 - 17,134.27 - Total (I+II+III) 1,48,652.66 867.91 0.58% 1,06,497.01 902.42 0.85% * includes advances to NBFCs and Small Finance Banks. 8. Derivatives (a) Forward Rate Agreement / Interest Rate Swap Sr. No Particulars FY 2018-19 FY 2017-18 i) The notional principal of swap agreements USD 40,310,000 USD 40,310,000 ii) Losses which would be incurred if counterparties USD 209,019 NIL failed to fulfill their obligations under the agreements iii) Collateral required by the bank upon entering into swaps NIL NIL iv) Concentration of credit risk arising from the swaps USD 6,193 USD 201,550 v) The fair value of the swap book USD (19,056) USD (571,037) (b) Exchange Traded Interest Rate Derivatives Sr. No Particulars FY 2018-19 FY 2017-18 i) Notional principal amount of exchange traded - - interest rate derivatives undertaken during the year (instrument - wise) ii) Notional principal amount of exchange traded - - interest rate derivatives outstanding as on March 31 (instrument - wise) iii) Notional principal amount of exchange traded - - interest rate derivatives outstanding and not "highly effective" (instrument - wise) iv) Mark-to-market value of exchange traded interest - - rate derivatives outstanding and not "highly effective" (instrument - wise) 82 Annual Report 2018-19 APPENDIX-II (c) Disclosures on risk exposure in derivatives (i) Qualitative Disclosures (1) The Bank uses Derivatives for hedging of interest rate and exchange risk arising out of mismatch in the assets and liabilities. All derivatives undertaken by Bank are for hedging purposes with underlying as Foreign Currency borrowings, which are not MTM, but only translated. The Bank does not undertake trading in Derivatives. (2) Internal Control guidelines and accounting policies are framed and approved by the Board. The derivative structure is undertaken only after approval of the competent authority. The particulars of derivative details undertaken are also reported to ALCO/Board. (3) The Bank has put systems in place for mitigating the risk arising out of derivative deals. The Bank follows the accrual method for accounting the transactions arising out of derivative deals. (ii) Quantitative Disclosures (` crore) Sr. Particulars FY 2018-19 FY 2017-18 No. Currency Interest rate Currency Interest rate Derivatives Derivatives Derivatives Derivatives 1 Derivatives 7,875.32 8,508.91 (Notional Principal Amount) (i) For hedging 7,875.32 - 8,508.91 - (ii) For trading - - - - 2 Marked to Market Positions [1] 134.09 240.04 (i) Asset (+) 134.09 - 240.04 - (ii) Liability (-) - - - - 3 Credit Exposure [2] 698.06 - 803.78 - 4 Likely impact of one percentage 143.04 167.74 change in interest rate (100* PV01) (i) On hedging derivatives 143.04 - 167.74 - (ii) On trading derivatives - - - - 5 Maximum and Minimum of - 100*PV01 observed during the year (i) On hedging 170.56/143.04 - 186.30/167.74 - (ii) On trading - - - - 9. Disclosure of Letters of Comfort (LoCs) issued by AIFIs The particulars of Letters of Comfort (LoCs) issued during the year, assessed financial impact, and assessed cumulative financial obligations under the LoCs issued in the past and outstanding is as under: (` crore) LoCs outstanding as on LoC issued LoCs redeemed LoCs outstanding as on March 31, 2018 during the year during the year March 31, 2019 No of LoC Amount No of LoC Amount No of LoC Amount No of LoC Amount 0 - 1 0.94 0 - 1 0.94 83 Annual Report 2018-19 10. Asset Liability Management (` crore) 1 to 14 15 to 28 29 days to Over 3 Over 6 Over 1 Over 3 Over 5 Total days days 3 months months & up months & year & up years & up years to 6 months up to 1 year to 3 years to 5 years Deposits 296.00 975.05 3,537.49 2,264.07 7,607.48 61,149.00 506.00 436.00 76,771.09 Advances 2,404.14 7,125.10 22,358.73 15,243.44 19,147.74 73,549.29 4,350.50 552.00 1,44,730.94 Investments 6,930.00 200.00 1,400.00 5.00 434.00 109.00 1,114.00 4,136.00 14,328.00 Borrowings 15.00 620.00 12,019.00 9,653.00 15,112.00 24,841.00 1,858.00 531.00 64,649.00 Foreign 174.00 86.00 1,556.00 285.00 984.00 3,408.00 2,218.00 2,595.00 11,306.00 Currency assets Foreign 2.00 - 1,319.00 148.00 544.00 2,782.00 2,478.00 3,983.00 11,256.00 Currency liabilities 11. Draw Down from Reserves There is no draw down from Reserves during the current year and previous year. 12. Business Ratios Particulars FY 2018-19 FY 2017-18 Return on average Equity (before provisions for taxation) (%) 17.11 15.44 Return on average assets (before provisions for taxation) (%) 1.98 2.21 Net Profit per employee (` crore) 1.77 1.39 13. Disclosure of Penalties imposed by RBI RBI had not imposed any penalty on the Bank during the current year and previous year. 14. Customer Complaints Particulars FY 2018-19 FY 2017-18 i No. of complaints pending at the beginning of the year 2 2 ii No. of complaints received during the year 183 63 iii No. of complaints redressed during the year 175 63 iv No. of complaints pending at the end of the year 10 2 15. Off-Balance Sheet SPVs Sponsored The Bank had no Off-balance sheet SPVs sponsored during the current year and previous year. 16. Disclosure as per specific accounting standards  ccounting Standard 5 – Net Profit or Loss for the period, prior period items and changes in accounting (a) A policies Income in schedule XIII - 'other income' includes Prior Period Income of ` 3,21,69,155 for FY 2018-19 [Previous Year ` 24,23,74,283] and Other expenditure in schedule XIV - 'Operating Expenses' for FY 2018-19 includes Prior Period Expenditure of (` 19,33,197) [Previous Year (` 6,72,86,874)]. (b) Accounting Standard 17 – Segment Reporting As required under RBI master directions and Accounting Standard-17 'Segment Reporting' the Bank has disclosed "Business segment" as the Primary Segment. Since the Bank operates in India, there are no reportable geographical segments. Under Business Segment, the Bank has identified Whole Sale Operations (Direct Lending), Whole Sale Operations (Refinance) and Treasury as its three reporting segments. These segments have been identified after considering the nature and risk profile of the products and services, the organization structure and the internal reporting system of the Bank. Previous year's figures have been regrouped and reclassified to conform to the current year's methodology. 84 Annual Report 2018-19 APPENDIX-II Part A: BUSINESS SEGMENTS (` crore) Business Segments Wholesale Wholesale Treasury Total Operations Operations (Direct Lending) (Refinance) Particulars FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 1 Segment Revenue 1,007 1,212 8,261 5,364 649 810 9,917 7,386 Exceptional Items - - Total 9,917 7386 2 Segment Results 191 200 2,293 1,956 220 218 2,704 2,376 Exceptional Items - - Total 2,704 2376 Unallocable Expenses 179 169 Operating profit 2,526 2207 Income Tax 568 631 (Net of write back) Share of profit in associates 1 1 Net profit 1,959 1577 3 Other information Segment Assets 9,526 9,744 1,29,971 97,462 14,236 15,404 1,53,733 1,22,611 Unallocated Assets 17,721 1,720 Total Assets 1,71,454 1,24,331 Segment Liabilities 6,726 6,936 1,18,901 88,689 15,287 11,858 1,40,914 1,07,475 Unallocated Liabilities 13,977 1,871 Total 1,54,891 1,09,346 Capital / Reserves 2,812 2,793 10,960 6,798 2,790 5,475 16,563 14,985 Total 16,563 14,985 Total Liabilities 1,71,454 1,24,331 Part B: GEOGRAPHIC SEGMENTS - Nil 85 Annual Report 2018-19 (c) Accounting Standard 18 – Related Party Disclosures (` crore) Items / Related Party Parent Sub-sidiaries Associates/ Key Relatives Total (as per Joint Management of Key ownership ventures Personnel@ Management or control) Personnel Borrowings# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Deposit# Outstanding at the year end - - 0.50 0.81 - 1.31 Maximum during the year - 121.89 0.50 0.81 - 123.21 Placement of deposits# - - - - - - Outstanding at the year end - - - - - - Maximum during the year - - - - - - Advances# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Investments# Outstanding at the year end - 1,751.05 28.60 - - 1,779.65 Maximum during the year - 1,751.05 28.60 - - 1,779.65 Non funded commitments# - - - - - - Outstanding at the year end - - - - - - Maximum during the year - - - - - - Leasing arrangements availed# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Leasing arrangements provided# Outstanding at the year end - - - - - - Maximum during the year - - - - - - Purchase of fixed assets - - - - - - Sale of fixed assets - - - - - - Interest paid - 1.79 0.03 0.02 - 1.84 Interest received Rendering of services* - 36.57 3.31 - - 39.89 Receiving of services* - - - - - - Management contracts* - - - 0.93** - 0.93** @ Whole time directors of the Board # The outstanding at the year end and the maximum during the year are to be disclosed * Contract services etc. and not services like remittance facilities, locker facilities etc. ** Remuneration to Key Management Personnel. 86 Annual Report 2018-19 APPENDIX-II 17. Unamortised Pension and Gratuity Liabilities The pension and gratuity liability are provided for on the basis of an actuarial valuation made at the end of each financial year based on the projected unit credit method. The acturial gains/ losses are taken to the profit & loss account and are not amortized. As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 87 Annual Report 2018-19 Consolidated Cash Flow Statement for the year ended March 31, 2019 (Amount in `) March 31, 2018 Particulars March 31, 2019 March 31, 2019 1. Cash Flow from Operating Activities 22,07,29,34,129 Net Profit before tax as per P & L Account 25,27,39,54,039 Adjustments for: 11,44,13,211 Depreciation 18,43,71,236 (19,31,47,663) Provision for net depreciation in investments (2,67,59,59,652) 1,57,99,47,620 Provisions made (net of write back) 5,92,27,06,235 (2,51,13,83,994) Profit on sale of investments (net) (3,24,91,18,727) (22,69,860) Profit on sale of fixed assets (1,58,59,255) (7,34,78,100) Dividend Received on Investments (15,04,21,412) 1,57,18,425 20,98,70,15,344 Cash generated from operations 25,28,96,72,464 (Prior to changes in operating Assets and Liabilities) Adjustments for net changes in: (6,96,24,96,647) Current assets (19,31,46,34,266) 2,09,36,84,066 Current liabilities (13,05,52,32,446) 1,81,37,84,030 Bills of Exchange 3,92,85,72,063 (3,17,53,17,83,144) Loans & Advances (4,25,40,24,27,769) 31,66,20,54,018 Net Proceeds of Bonds and Debentures & other 1,30,90,67,95,800 borrowings 3,13,87,68,96,577 Deposits received 3,34,22,86,35,474 11,29,17,08,854 24,95,21,38,900 45,93,91,54,244 36,58,13,81,318 (5,88,97,36,590) Payment of Tax (7,58,07,86,087) 40,04,94,17,654 Net Cash flow from operating Activities 29,00,05,95,231 2. Cash Flow from Investing Activities (46,37,51,683) Net (Purchase)/Sale of fixed assets (61,84,35,556) (16,49,23,60,626) Net (Purchase)/sale/redemption of Investments (5,34,25,60,587) 24,50,87,253 Dividend Received on Investments 39,74,12,153 (16,71,10,25,056) Net cash used in Investing Activities (5,56,35,83,990) 3. Cash flow from Financing Activities Proceeds from issuance of share capital & share premium (1,30,21,42,163) Dividend on Equity Shares & tax on Dividend (1,62,57,07,281) (1,30,21,42,163) Net cash used in Financing Activities (1,62,57,07,281) 22,03,62,50,435 4. Net increase/(decrease) in cash and cash 21,81,13,03,960 equivalents 67,36,38,40,810 5. Cash and Cash Equivalents at the beginning of the 89,40,00,91,245 period 89,40,00,91,245 6. Cash and Cash Equivalents at the end of the period 1,11,21,13,95,205 88 Annual Report 2018-19 APPENDIX-II (Amount in `) March 31, 2018 Particulars March 31, 2019 March 31, 2019 7 Cash and cash equivalents at the end of the period includes 6,24,411 Cash in Hand 6,14,123 21,03,83,844 Current account balance with Bank 68,39,55,262 22,01,00,00,018 Mutual Funds 9,00,00,00,000 67,17,90,82,972 Deposits 1,01,52,68,25,820 Note: Cash Flow statement has been prepared as per the Indirect Method prescribed in AS-3 (Revised) ‘Cash Flow Statement’ issued by the Institute of Chartered Accountants of India (ICAI) Significant Accounting Policies XV Notes to Accounts XVI As per our report of even date BY ORDER OF THE BOARD For Chhajed & Doshi Rajendra Agrawal Manoj Mittal Ajay Kumar Kapur Mohammad Mustafa Chartered Accountants General Manager Dy. Managing Director Dy. Managing Director Chairman & Managing Director FRN: 101794W (Corporate Accounts Vertical) Kiran K Daftary G Gopalakrishna Ashish Gupta Partner Director Director M. No.: 010279 Lucknow, May 10, 2019 89 Annual Report 2018-19 NOTES NOTES NOTES En route to fulfilling Mahatma Gandhi’s vision for small scale sector Small Industries Development Bank of India www.sidbi.in @sidbiofficial SidbiOfficial SidbiOfficial SidbiOfficial